Source: BS Context: Fintech firm Kiwi has announced the launch of India’s first-ever interest-backed EMI option on UPI payments, enabling users to convert high-value transactions into instalments while earning cashback equivalent to the interest paid. The move comes amid a broader push to expand credit accessibility via real-time payment systems. Key Highlights Unique Model: Users can split big-ticket UPI payments into EMIs with cashback on interest — a first-of-its-kind feature in India’s fintech ecosystem. Objective: To promote credit-based UPI transactions while reducing the effective cost of borrowing for consumers.
Multi-Asset Allocation Funds
Source: BS Context: Multi-asset allocation funds (MAAFs) have emerged as strong performers among mutual funds (MFs), rivalling medium-term returns from traditional equity categories while maintaining a lower risk profile. What Are Multi-Asset Allocation Funds (MAAFs)? Multi-Asset Allocation Funds are hybrid mutual fund schemes that invest in at least three different asset classes, such as: Regulatory Mandate (SEBI Rule): As per the Securities and Exchange Board of India (SEBI), MAAFs must invest a minimum of 10% in each of at least three asset classes at all times. Key Features of MAAFs Why MAAFs Are Performing Well Comparison: MAAFs vs. Traditional Equity Funds Feature MAAFs Equity Funds Asset Mix Equity + Debt + Commodities Primarily Equity Volatility Moderate High Return Potential (3–5 yrs) 9–12% (approx.) 11–14% (approx.) Downside Protection High (diversified assets) Low Best Suited For Moderate-risk, long-term investors High-risk, growth-focused investors
RBI Proposes Overhaul of ECB Framework
Source: IE Context: The Reserve Bank of India (RBI) has released a draft framework to reform External Commercial Borrowing (ECB) regulations, aiming to enhance access to foreign capital while ensuring prudent risk management. The proposal seeks to link borrowing limits to company financial strength, remove cost caps, and simplify end-use and maturity rules to align with global standards. Key Proposals:
Scale-Based Regulation (SBR) Framework
Source: ET Context: The Reserve Bank of India (RBI) has directed 15 Upper Layer Non-Banking Financial Companies (NBFCs), including Tata Sons (a Core Investment Company – CIC), to list on stock exchanges by 30 September 2025. This mandate stems from the Scale-Based Regulation (SBR) Framework, which classifies NBFCs based on their size, activity, and systemic importance to ensure proportionate regulation and stronger governance in the shadow banking sector. About the Scale-Based Regulation (SBR) Framework Introduced by the RBI in October 2021, the Scale-Based Regulation (SBR) framework is a risk-based regulatory structure for NBFCs.It aims to align regulatory intensity with the size, complexity, and risk profile of NBFCs—similar to the tiered approach used for banks. Objective Four-Layer Structure Under the SBR Framework Layer Category Name Description / Entities Covered Regulatory Intensity 1. Base Layer (NBFC-BL) Smaller NBFCs Non-systemically important NBFCs (e.g., small loan companies, investment firms) Light 2. Middle Layer (NBFC-ML) Larger systemically important NBFCs Includes deposit-taking NBFCs, large housing finance companies, infrastructure debt funds, etc. Moderate 3. Upper Layer (NBFC-UL) Top 10–15 large and systemically critical NBFCs Identified by RBI based on size, leverage, interconnectedness, complexity, and risk profile High 4. Top Layer (NBFC-TL) Possible future category To be used if RBI observes extreme risk concentration in certain NBFCs Very High Key Features of the SBR Framework
Basic Savings Bank Deposit (BSBD) Accounts
Source: BS Context: The Reserve Bank of India (RBI) has issued a draft circular updating guidelines for Basic Savings Bank Deposit (BSBD) accounts, aiming to enhance customer service, promote digitisation, and deepen financial inclusion. BSBD accounts include those opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY). What Is a BSBD Account? Key Features of BSBD Accounts Feature Description 1. Zero Minimum Balance No minimum balance requirement. All basic facilities are provided free of charge. 2. Unlimited Deposits Deposits allowed through cash, ATMs, cash deposit machines, and electronic channels without any limit. 3. Free Core Services • Minimum four free withdrawals per month (including ATM & fund transfers) • Free debit card and ATM facilities • Cheque book with at least 25 leaves per year • Free passbook or monthly statement • Free internet and mobile banking access 4. Unlimited Digital Transactions No cap or charge on UPI, NEFT, RTGS, IMPS, or PoS transactions. 5. Optional Paid Services Banks may offer additional services with or without charges, but must follow transparent and non-discriminatory practices with prior disclosure to customers. 6. Single Account Restriction • Only one BSBD account allowed per customer across all banks. • Customers must declare they do not hold another BSBD account. • If another savings account exists, it must be closed within 30 days of opening a BSBD account. • BSBD holders may also open term deposit accounts. 7. Conversion and Switching Existing savings account holders can convert their accounts to BSBD within seven days upon request. Significance
External Commercial Borrowings (ECBs)
Context: The Reserve Bank of India (RBI) has announced that it will soon release a draft framework to simplify and rationalise rules governing External Commercial Borrowings (ECBs). The new framework aims to expand the scope of eligible borrowers and recognised lenders, relax borrowing and maturity limits, remove cost restrictions, and simplify reporting procedures to enhance ease of doing business and promote capital inflows. About External Commercial Borrowings (ECBs) External Commercial Borrowings (ECBs) are commercial loans raised by eligible Indian entities from recognised non-resident entities in foreign currency or Indian Rupees (INR).They are governed under the Foreign Exchange Management Act (FEMA), 1999, and related RBI regulations. Organisations Involved Aim of ECBs Key Features of External Commercial Borrowings Routes of Borrowing Basic Conditions Permitted Uses Prohibited Uses
Snow Leopards
Context: The Himachal Pradesh Forest Department has recorded 83 snow leopards in its latest 2025 survey, showing a significant rise from 51 individuals reported in 2021. The increase reflects ongoing conservation success under India’s Project Snow Leopard and improved habitat monitoring through scientific tracking methods. About the Snow Leopard (Panthera uncia) Conservation Status Key Conservation Initiatives in India
Cyclone Shakthi
Source: TH Context: The India Meteorological Department (IMD) has officially confirmed the formation of Cyclone Shakthi over the northeast Arabian Sea, marking one of the early post-monsoon cyclonic events of 2025. About Cyclone Shakthi Origin and Development: Why the Bay of Bengal Gets More Cyclones than the Arabian Sea? Factor Bay of Bengal Arabian Sea Sea Surface Temperature Warmer (29–30°C) throughout the year Cooler due to strong winds and high evaporation Moisture Availability High moisture from river inflows and monsoon winds Dry winds from Oman and Yemen reduce moisture External Atmospheric Triggers Frequently receives remnants of Pacific typhoons that re-intensify Rarely influenced by external low-pressure systems, leading to fewer cyclones
Daily Current Affairs (DCA) 2&3 October, 2025
Daily Current Affairs Quiz2 & 3 October, 2025 National Affairs 1. Beti Bachao, Beti Padhao Completes a Decade Context: The Beti Bachao, Beti Padhao (BBBP) scheme, launched in 2015, has completed 10 years, registering progress in sex ratio at birth and girls’ education outcomes across India. The initiative has been implemented as a convergence of Women & Child Development (WCD), Health, and HRD Ministries. Beti Bachao, Beti Padhao (BBBP) Scheme Achievements of BBBP 2. ANRF launches SARAL Tool to Simplify Scientific Research Source: TH Context: The Anusandhan National Research Foundation (ANRF) has launched the SARAL Tool (Simplified and Automated Research Amplification and Learning). It is an AI-powered platform designed to simplify complex research papers into easy-to-understand summaries. About SARAL Tool Key Features Banking/Finance 1. RBI MPC Meeting – October 1, 2025 Context: The Reserve Bank of India (RBI), in its October 2025 Monetary Policy Committee (MPC) meeting, kept the repo rate unchanged at 5.5% with a neutral stance. The decision comes amid tariff-related uncertainties, the need to evaluate the impact of previous rate cuts, and an improving domestic macroeconomic outlook. Policy Decisions Macro Outlook Rationale Key Regulatory & Structural Announcements Implications For Economy For Banks & Financial Institutions For Borrowers & Investors Key Terms Term Definition Impact / Purpose Repo Rate Rate at which RBI lends short-term funds to commercial banks against government securities as collateral. ↑ Repo → Loans costly → Inflation control. ↓ Repo → Loans cheaper → Boosts growth. Reverse Repo Rate Rate at which RBI borrows money from commercial banks. ↑ Reverse Repo → Absorbs liquidity → Controls inflation. ↓ Reverse Repo → Banks lend more → Boosts growth. ECL (Expected Credit Loss) Framework Forward-looking provisioning system where banks estimate expected loan losses instead of waiting for defaults. Strengthens banking sector resilience by reducing risk of sudden shocks. Basel III Norms International banking reforms focusing on capital adequacy, leverage, and liquidity standards. Ensures financial stability, prevents systemic risks, enhances risk management. 2. RBI MPC October 2025 – Key Takeaways Context: Policy Rates Instrument Rate Remarks Repo Rate 5.50% Unchanged (second consecutive pause) Reverse Repo (SDF) 5.25% By convention, 25 bps below repo Bank Rate & MSF 5.75% No change Macro Outlook GDP Growth (FY26) CPI Inflation (FY26) External Sector Key Regulatory & Structural Announcements Implications For the Economy: For Banks & Financial Institutions: For Borrowers & Investors: Key Terms for RBI Grade B / Exams 3. RBI Withdraws System-Level Lending Cap for Large Corporates Source: BS Context: The Reserve Bank of India (RBI) has withdrawn its 2016 circular that restricted banks from lending beyond a specified threshold to a single large corporate or group at the systemic level, while maintaining the large exposure framework at individual bank level. Key Highlights: Market and Banking Impact 4. RBI Proposes Lower Risk Weights for NBFC Infrastructure Loans Source: BS Context: The Reserve Bank of India (RBI) has proposed reducing risk weights for loans by Non-Banking Financial Companies (NBFCs) to operational, high-quality infrastructure projects. Key Highlights Scope of Proposal Expected Impact Risks & Cautions 5. RBI to Consider Issuance of New Urban Cooperative Bank (UCB) Licences Source: BL Context: The Reserve Bank of India (RBI) has announced plans to issue a discussion paper on licensing new banks in the Urban Cooperative Banking (UCB) sector, indicating a shift in policy after nearly two decades. Background What are UCBs? RBI Governance of UCBs Aspect Legal Framework / Authority Scope of Regulation Banking Regulation Act, 1949 Applied to UCBs since 1966; regulated by RBI Banking activities such as deposit mobilization, lending, capital adequacy, prudential norms, and supervision. State Cooperative Societies Act Registration under respective State Act Governance, management elections, audit, and administrative control at the state level. Multi-State Cooperative Societies Act, 2002 Registration if UCBs operate in more than one state Governance, management elections, audit, and administration under Central Registrar of Cooperative Societies. 6. RBI Eases Bank Lending to Boost Corporate Growth and Capital Markets Context: The RBI has introduced its most comprehensive reforms in bank lending, targeting both corporate and individual borrowers. The aim is to reverse disintermediation (where companies bypass banks for funding), strengthen capital markets, and support economic growth. Key Reforms and Implications Corporate Lending and Acquisitions Lending to Large Companies Individual Investor Lending Risk Management and Prudential Measures External Commercial Borrowing (ECB) and Export Credit 7. Nuvama Wealth Gets SEBI Approval to Set Up Mutual Fund Business Source: BS Context: Nuvama Wealth Management Ltd. (formerly Edelweiss Securities arm) has received regulatory clearance from the Securities and Exchange Board of India (SEBI) to enter the mutual fund (MF) industry as a sponsor. SEBI Norms: Eligibility of a Mutual Fund Sponsor The sponsor is the promoter who sets up the mutual fund and AMC. According to SEBI (Mutual Funds) Regulations, 1996, the following conditions must be fulfilled: Criteria Key Requirements Track Record & Reputation • Minimum 5 years of business track record in financial services. • Positive net worth in each of the last 5 years. • Net worth > ₹50 crore in the immediately preceding year. • Profitability in at least 3 out of 5 years. Fit & Proper Criteria • Must satisfy SEBI’s “fit and proper person” norms. • No record of fraud, conviction, or regulatory violations. Shareholding & Contribution • Sponsor must contribute ≥ 40% of AMC’s net worth. • Minimum AMC net worth: ₹50 crore (as per latest SEBI amendments). • Contribution ensures “skin in the game”. Professional Setup • AMC & Trustee Co. must have ≥ 50% independent directors/trustees. • No conflict of interest with the sponsor. Regulatory Approval • SEBI conducts due diligence on financial strength, governance, compliance history, and risk management before granting approval. 8. Fin-Influencers Context: The Securities and Exchange Board of India (SEBI) has been actively cracking down on financial influencers (“fin-fluencers”) for spreading misinformation and fraudulent advice. Yet, a recent SEBI-Kantar study shows Indian investors continue to place significant trust in them. Who Are Finfluencers? SEBI’s Concerns SEBI’s Crackdown & Regulations Key Terms Agriculture 1. National Pulses Mission (2025–31) Source:
Crop Insurance Premiums Fall 34% in FY26
Source: BS Context: India’s crop insurance sector is witnessing a sharp decline in premium collections in FY26 due to structural reforms, aggressive pricing, and re-tendering by states. The trend raises concerns about the sustainability of insurers under the current loss-sharing models. Key Highlights:
