Securities and Exchange Board of India (SEBI) relaxes norms allowing issuers to sell zero-coupon debt securities at face value of Rs 10,000.
[Securities and Exchange Board of India (SEBI)]
Key Updates:
- SEBI now permits issuers to offer zero-coupon debt securities with a fixed maturity and no structured obligations at a reduced face value of Rs 10,000.
- The relaxation expands the July 2024 circular that previously allowed only interest-bearing or dividend-paying debt securities to be issued at Rs 10,000 face value.
- Zero-coupon bonds are issued at a discount and redeemed at face value, with returns earned through price appreciation.
Similar / Past Coverage
- NITI Aayog CEO Shri B.V.R. Subrahmanyam released the report titled “Deepening the Corporate Bond Market in India” on 11th December 2025 in New Delhi.
- The report outlines a reform-oriented roadmap to build a deeper, more resilient, and inclusive bond market capable of supporting India’s long-term investment requirements.
- India’s corporate bond market remains constrained by limited market depth, concentrated investor profiles, and modest secondary-market activity.
- The report recommends strengthening legal and regulatory frameworks, enhancing market infrastructure and transparency, and facilitating greater issuance by mid-size firms.
- It proposes broadening participation of insurance, pension and retail investors and expanding product offerings such as credit-enhanced instruments, long-tenor bonds, and sustainability-linked products.
- The study advocates improving liquidity in primary and secondary markets through deeper market-making and repo facilities and leveraging digital innovations including tokenised bonds and integrated data systems.
- Total Expense Ratio shall now be the sum of BER, brokerage, regulatory levies and statutory levies.
- Base expense ratio limits for equity-oriented schemes and other than equity oriented schemes under various AUM slabs have been cut by up to 15 basis points.
- Base expense ratio limit for index funds or ETF revised to 0.9 per cent from 1 per cent.
- Close-ended equity-oriented schemes BER limit now stands at 1 per cent as against 1.25 per cent.
- Maximum brokerage fee that mutual funds pay on cash market transactions halved to 6 bps from 12 bps.
- Brokerage cap for derivative transactions revised downwards to 2 bps from 5 bps, excluding applicable levies.
- SEBI removed the additional 5 bps expense allowance currently permitted to be charged to schemes with exit loads as a transitory measure.
- Sebi has introduced a threshold-based framework to determine the materiality of related party transactions (RPTs), based on the annual consolidated turnover of the listed entity.
- The new norms are aimed at addressing practical challenges, removing ambiguities, and striking a balance between investor protection and ease of doing business under the Listing Obligations and Disclosure Requirements (LODR) norms.
- For entities with turnover up to Rs 20,000 crore, a transaction will be considered material if it exceeds 10 per cent of the annual consolidated turnover.
- In the case of entities with turnover between Rs 20,001 crore and Rs 40,000 crore, the threshold would be Rs 2,000 crore plus 5 per cent of the turnover exceeding Rs 20,000 crore.
- For entities with turnover exceeding Rs 40,000 crore, the threshold will be Rs 3,000 crore plus 2.5 per cent of the turnover exceeding Rs 40,000 crore, or Rs 5,000 crore, whichever is lower.
- An absolute threshold of Rs 5,000 crore as an upper ceiling has been notified for listed entities having a turnover above Rs 40,000 crore to protect the interests of minority shareholders.
- Earlier, a listed entity was required to consider an RPT as material if the transaction exceeded Rs 1,000 crore or 10 per cent of the entity's annual consolidated turnover, whichever is lower.
- The new norms came after stakeholders pointed out that the absolute materiality threshold of Rs 1,000 crore promotes a 'one-size-fits-all' approach.
- Sebi has relaxed the minimum information required to be furnished to the audit committee and shareholders for RPT approvals for smaller transactions.
- If the total value of RPTs with a related party in a financial year does not exceed 1 per cent of the listed entity's annual consolidated turnover or Rs 10 crore, whichever is lower, then a simplified set of disclosures would be submitted for approval.
- Omnibus approval granted by the shareholders for material related party transactions in an annual general meeting shall be valid till the date of the next annual general meeting (AGM).
- In case of omnibus approvals for material related party transactions, granted by shareholders in general meetings other than AGM, the validity of such omnibus approvals shall not exceed one year from the date of such approval.
- Sebi proposes excluding ZCZP bonds from portfolio value calculation for BSDA eligibility.
- ZCZP bonds are non-transferable, non-tradable, and do not provide monetary return or redemption value.
- Delisted securities may be treated on par with suspended securities for BSDA valuation.
- Illiquid securities will use last closing price for BSDA eligibility determination.
- Depository Participants (DPs) to reassess BSDA eligibility quarterly through system-driven evaluations.
- Beneficial Owner (BO) consent may be accepted via additional authenticated digital methods beyond registered email.
Ministry of Railways awards Titagarh Rail Systems ₹273.24 crore order for 62 Rail Borne Maintenance Vehicles.
[Ministry of Railways, Titagarh Rail Systems]
Key Updates:
- The contract covers design, manufacturing, supply, testing, commissioning, training, servicing and breakdown maintenance support for 62 Rail Borne Maintenance Vehicles.
- Supply of the machines is expected to begin within 15 months from the date of order placement.
- Delivery of all 62 vehicles along with the complete set of spares is scheduled to be completed within 48 months.
- Titagarh Rail Systems’ total order book stands at around ₹15,100 crore, translating into a 4.5x book-to-bill ratio.
- Nuvama maintains a Buy rating on Titagarh Rail Systems with a revised target price of ₹1,088, implying a 40.5% upside from the current market price of ₹774.
Similar / Past Coverage
- The Union Cabinet on Wednesday approved doubling of the 141-km Dwarka-Kanalus rail line in Gujarat and building third and fourth lines between Badlapur and Karjat (32 km) in Mumbai metropolitan region.
- The two line-expansion projects worth Rs 2,781 crore are part of Indian Railways’ push to improve connectivity on routes with high passenger footfall.
- The Devbhumi Dwarka (Okha)-Kanalus rail line will improve connectivity to the Dwarkadhish temple, a key pilgrimage site, and transportation of commodities such as coal, salt, container, and cement.
- The Badlapur-Karjat line... will further help the commuters between Pune to Mumbai.
- Contract value: ₹2,095.70 crore signed between Ministry of Defence and Bharat Dynamics Limited (BDL)
- Equipment: INVAR laser-guided anti-tank missiles to be inducted into Indian Army’s T-90 tanks
- Objective: Strengthen lethality and firepower of T-90 tanks and enhance mechanised warfare capabilities
- Implementing Ministry: Ministry of Road Transport and Highways (MoRTH) and National Highways Authority of India (NHAI)
- Objective: Award 10,000 km of National Highway projects in FY 2026, up from 6,000 km awarded in FY 2025
- Key procedural reform: 90% land acquisition must be completed before awarding projects under BOT/HAM modes, mirroring EPC requirement
- Financial outlay: MoRTH received ₹2,87,333 crore in Union Budget 2025-26, with ₹2.72 lakh crore as capital expenditure
- Sebi has granted in-principle approval to register 'Raajmarg Infra Investment Trust' (RIIT) as an Infrastructure Investment Trust (InvIT).
- RIIT must meet specific conditions over the next six months including appointment of directors, submission of requisite financial statements, and compliance with other regulatory requirements.
- NHAI incorporated Raajmarg Infra Investment Managers Pvt. Ltd. (RIIMPL) last month as the investment manager for RIIT.
- RIIMPL is a collaborative venture with equity participation from State Bank of India, Punjab National Bank, NaBFID, Axis Bank, Bajaj Finserv Ventures Ltd., HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank, and Yes Bank.
- The InvIT aims to unlock monetisation potential of National Highway assets and create a long-term investment instrument targeting retail and domestic investors.
Reserve Bank of India (RBI) Issues Guidelines for Urban Co-operative Banks (UCBs) Licensing and Classification
[Reserve Bank of India (RBI)]
Key Updates:
- The Reserve Bank of India (RBI) has issued the Urban Co-operative Banks – Licensing, Scheduling and Regulatory Classification Guidelines, 2025.
- The RBI stated that no fresh proposals for the organization of new UCBs or the conversion of cooperative credit societies into UCBs are being considered.
- A four-tiered regulatory framework has been adopted for UCBs based on deposit size as of March 31 of the preceding financial year.
- Tier 1 UCBs include all unit UCBs, salary earners’ UCBs, and other UCBs with deposits up to ₹100 crore.
- Tier 2 UCBs are defined as those with deposits of more than ₹100 crore and up to ₹1000 crore.
- Tier 3 UCBs consist of those with deposits of more than ₹1000 crore and up to ₹10,000 crore.
- Tier 4 UCBs include those with deposits exceeding ₹10,000 crore.
- UCBs transitioning to a higher Tier are allowed a glide path of up to two years to comply with higher regulatory requirements.
- To be included in the Second Schedule to the RBI Act, 1934, a UCB must maintain Tier 3 deposit levels for two consecutive years.
- UCBs seeking scheduling must maintain a Capital to Risk-Weighted Assets Ratio (CRAR) of at least three per cent more than the minimum requirement.
- The eligibility for scheduling also requires the absence of major regulatory and supervisory concerns based on the latest RBI inspection or audited financials.
Similar / Past Coverage
- The Reserve Bank of India (RBI) released final guidelines on transaction account directions.
- The final guidelines removed restrictions on cash credit (CC) accounts.
- The revised rule permits any lending bank with more than 10% exposure to open a current or overdraft account for the borrower.
- In situations where no bank or only one bank meets this threshold, the two lenders with the largest exposure will be allowed to operate such accounts.
- The requirement to transfer funds from collection accounts to designated transaction accounts within two working days remains unchanged.
- The guidelines will come into effect from April 1.
- The Reserve Bank of India (RBI) final guidelines allow banks and their group entities to continue overlapping lending activities, preventing restructuring for 12 large bank groups.
- The draft guidelines would have impacted 12 bank groups, accounting for ~55% of sectoral advances, and 2-6% of consolidated advances of individual banks.
- The final framework permits overlapping lending operations subject to board approval.
- Of the 26 bank group entities with lending operations, only two currently qualify as upper-layer Non-Banking Financial Companies (NBFCs).
- The remaining bank group entities must adopt upper-layer norms (excluding listing requirements) by March 31, 2028.
- The guidelines impose a 20% ceiling on a bank group’s shareholding in an Asset Reconstruction Company (ARC).
- There are currently 13 ARCs in which one or more banks hold stakes.
- In all but two of these ARCs, shareholding by any single bank is less than 20%.
- Banks with shareholding exceeding the 20% limit in ARCs will have to partially divest by March 2028.
- The Reserve Bank of India (RBI) imposed a penalty of Rs 91 lakh on HDFC Bank.
- The penalty was for violating certain provisions of the Banking Regulation Act and non-compliance with certain directions.
- Deficiencies included those related to Know Your Customer (KYC) requirements.
- Non-compliance also pertained to ‘Interest Rate on Advances’ and ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’.
- A Statutory Inspection for Supervisory Evaluation of HDFC Bank was conducted with reference to its financial position as on March 31, 2024.
- HDFC Bank adopted multiple benchmarks within the same loan category.
- HDFC Bank outsourced the function of determining compliance with KYC norms of certain customers to its outsourcing agents.
- A wholly-owned subsidiary of HDFC Bank undertook business not permissible under Section 6 of the Banking Regulation (BR) Act.
- The Reserve Bank of India (RBI) imposed monetary penalties on three cooperative banks for non-compliance with various regulatory norms.
- By orders dated November 6, 2025, the RBI imposed a penalty of Rs 2 lakh on The Mumbai District Central Co-operative Bank Ltd., Maharashtra, for contravention of Section 20 of the Banking Regulation Act, 1949.
- The Karaikudi Co-operative Town Bank Ltd., Tamil Nadu, faced a penalty of Rs 1.5 lakh for non-compliance with RBI directions on ‘Prudential Norms on Capital Adequacy – Primary (Urban) Co-operative Banks (UCBs)’ and ‘Know Your Customer (KYC)’ guidelines.
- The District Co-operative Central Bank Ltd., Eluru, Andhra Pradesh, was fined Rs 50,000 for violations related to KYC norms.
- The penalty on the District Co-operative Central Bank Ltd., Eluru, Andhra Pradesh, was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
One State One RRB: Ministry of Finance (MoF) Unveils Unified Brand Identity for Regional Rural Banks (RRBs)
[Ministry of Finance (MoF)]
Key Updates:
- The Ministry of Finance (MoF) unveiled a new logo for Regional Rural Banks (RRBs) to signify a single and unified brand identity.
- On the principle of 'One State One RRB', the Department of Financial Services (DFS), MoF, has consolidated 26 RRBs across 11 states/UTs, effective from May 1, 2025.
- The colours of the RRB logo have been chosen to convey the objectives of the RRBs, where dark blue signifies finance and trust, while green signifies life and growth, reflecting their mission to serve rural India.
- Presently, 28 RRBs continue to serve the nation through an extensive network of over 22,000 branches in more than 700 districts.
- This common branding initiative by the government is expected to give RRBs a distinct, modern and easily recognisable brand identity nationwide, symbolising their collective commitment to financial inclusion and rural development.
Similar / Past Coverage
- Team MRF Tyres was officially crowned at the FIA Awards Gala for winning the 2025 FIA European Rally Championship (ERC) team title.
- Arun Mammen, Vice-Chairman and Managing Director of MRF Ltd., collected the trophy.
- MRF Tyres secured the ERC Team Championship for the third time, following the titles achieved in 2022 and 2023.
- Jeyandran Venugopal has been appointed as President and Chief Executive Officer of Reliance Retail Ventures Ltd (RRVL).
- He will work closely with Isha Ambani and the leadership team of Reliance Retail under the guidance of Mukesh Ambani and Manoj Modi.
- Prior to this, Venugopal served as Chief Product and Technology Officer at Flipkart.
- Union Bank of India (UBI) celebrated its 107th Foundation Day.
- A central function was organised by the bank’s headquarters in Mumbai at the Jio World Convention Centre, BKC.
- Department of Financial Services (DFS) Secretary M Nagaraju (IAS), Ministry of Finance, Government of India, attended as the chief guest.
- UBI launched two new digital initiatives — the Union E-Biz mobile app for MSMEs and the Union Ease mobile app.
- The bank announced the opening of 51 new branches across key regions.
- India Global Forum (IGF) announces a first-of-its-kind $250 million fund anchored by Ved Family Office and Ananta Capital.
- The fund targets Indian consumer and industrial brands for expansion into Middle East, Africa, Europe and beyond.
- IGF partners with DP World to provide participating companies access to world-class logistics and market-entry support.