Context: The Reserve Bank of India (RBI) will conduct a seven-day Variable Rate Reverse Repo (VRRR) auction worth ₹1 trillion on Friday, June 27, aiming to absorb excess liquidity from the banking system. The move follows a sharp build-up in surplus liquidity that has pushed the Weighted Average Call Rate (WACR) below the policy repo rate of 5.50%. Relation Between Variable Rate Repo (VRR) and Variable Rate Reverse Repo (VRRR) The Reserve Bank of India (RBI) uses multiple tools to manage systemic liquidity. Among these are the Variable Rate Repo (VRR) to inject liquidity and the Variable Rate Reverse Repo (VRRR) to absorb surplus liquidity from the banking system. What is Variable Rate Reverse Repo (VRRR)? How it Relates to Variable Rate Repo (VRR): Tool Objective Liquidity Effect VRR Inject funds into the banking system Adds liquidity VRRR Mop up surplus funds from banks Absorbs liquidity

Context: S&P Global Ratings on Tuesday revised India’s GDP growth forecast for FY26 to 6.5%, up by 0.2 percentage points from its previous estimate. The upgrade was published in its latest Economic Outlook for Asia-Pacific (Q3 2025). Key Assumptions Driving the Forecast Focus on Domestic Demand The report underlined that strong domestic demand would help limit the slowdown in India’s overall GDP growth, in contrast to export-dependent economies in the region which may face greater challenges due to softening global trade. S&P noted Background and Global Context In May 2025, S&P had lowered India’s FY26 growth forecast to 6.3%, citing uncertainty stemming from U.S. tariff policy and its spillover effects on global trade. That report, titled Global Macro Update: Seismic Shift in US Trade Policy Will Slow World Growth, warned of rising protectionism and its negative impact on global supply chains. Global Forecasts BS

Context and Regulatory Background Mandated Functional Segregation: Vertical Structure MIIs are required to operate through three distinct verticals: SEBI stresses resource prioritization for Verticals 1 & 2 due to their public interest significance. Rationale for Reform Key Proposals for Governance Reform Appointment of Executive Directors (EDs) Reporting Structures Directorship Restrictions Amendments & Public Consultation SEBI & TET

Context: Retail investors in India are increasingly shifting toward bond investments, prompted by volatile equity markets and plateauing fixed deposit (FD) rates. This trend is reshaping the investment ecosystem and drawing attention from venture capital (VC) firms. What Is Venture Capital (VC)? Types of Venture Capital Stage Description Pre-Seed Stage Earliest phase, focused on turning an idea into a business plan; often supported by incubators/accelerators. Seed Funding Helps startups launch their first product; usually no revenue yet, relies heavily on VC. Early-Stage Funding Required to scale production, expand marketing, and sales; divided into Series A, B, C rounds, etc. Difference: Venture Capital vs. Private Equity Parameter Venture Capital Private Equity Target Startups Mature businesses Risk High Moderate to low Ownership Minority stake Often majority control Focus Innovation and growth Restructuring and profitability

Context: Larsen & Toubro (L&T) has launched India’s first ESG (Environmental, Social and Governance) bonds on the National Stock Exchange (NSE), setting a precedent under SEBI’s new sustainability-linked bond framework notified in June 2025. Key Highlights: About SEBI’s ESG Bond Framework The framework mandates: Definition

Context: RazorpayX, the business banking arm of Razorpay, has introduced a new Corporate Credit Card tailored specifically for startups—an underserved segment in India’s financial ecosystem. Key Highlights Definitions

Context: The National Payments Corporation of India (NPCI) is set to roll out NACH 3.0 in the first week of July 2025, aiming to accelerate and secure recurring bank transactions such as salaries, pensions, EMIs, SIPs, and government subsidies under the National Automated Clearing House (NACH) platform. Key Features of NACH 3.0 What is NACH? About NPCI

Context: The Reserve Bank of India (RBI) has released the final guidelines on Income Recognition, Asset Classification, and Provisioning (IRACP) norms specifically for project finance loans, applicable to both banks and NBFCs. These directions aim to align provisioning with the actual credit risk during a project’s lifecycle. Key Highlights Provisioning for Projects Under Construction: Provisioning After Project Becomes Operational: Objective of the Framework Applicable Entities

Context: The India Post Payments Bank (IPPB), a 100% Government of India-owned entity under the Department of Posts, Ministry of Communications, has won the Digital Payments Award 2024–25. The award was conferred by the Department of Financial Services (DFS), Ministry of Finance for IPPB’s outstanding contribution in expanding digital payment access and driving financial inclusion across India. Key Highlights: About India Post Payments Bank (IPPB) Mission: To promote inclusive digital banking and make banking services accessible, simple, and affordable for underserved and unbanked populations.