Context: India’s fintech industry is exploring a proposal to introduce a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions—but only for large merchants, while ensuring that end users and small merchants remain unaffected, sources familiar with the policy discussions have said. Current Government Position What is Merchant Discount Rate (MDR)? The Merchant Discount Rate (MDR) is a fee that merchants pay to banks or payment processors for processing debit and credit card transactions. This fee covers the cost of the infrastructure and services required to handle digital payments. The MDR is typically a percentage of the transaction amount, and it varies based on factors like the payment method, transaction volume, and merchant type.  Key Features of the Proposal Impact of MDR on UPI

Context: Reserve Bank of India (RBI) Governor Sanjay Malhotra has confirmed that a decision on applications submitted by small finance banks (SFBs) seeking conversion into universal banks will be taken soon. His remarks were made in an interview earlier this week. Applications Under Consideration So far, three SFBs have formally applied for conversion: What Is Universal Banking? Universal banking is a system in which banks provide a wide variety of comprehensive financial services, including those tailored to retail, commercial, and investment services. RBI’s Licensing Guidelines Universal Banking Licences in India (2016) The Reserve Bank of India introduced the ‘On Tap’ Licensing Policy in August 2016 for private sector universal banks. This policy allows eligible applicants to seek a banking licence at any time, enhancing dynamism and competition in the Indian banking sector. RBI Eligibility Criteria for Conversion To be considered for conversion into a universal bank, SFBs must meet the following criteria: BS

Context: In a regulatory move set to reshape market dynamics in India’s equity derivatives segment, the Securities and Exchange Board of India (SEBI) has approved changes in the expiry days of weekly equity derivatives contracts for both the National Stock Exchange (NSE) and the BSE. Revised Expiry Schedule SEBI’s Rationale Implications for Market Participants For NSE: For BSE: TET

Context: In a move aimed at enhancing consumer protection and ensuring timely compliance with Know Your Customer (KYC) norms, the Reserve Bank of India (RBI) has introduced new notification guidelines for banks and regulated entities. These rules are to be implemented by January 1, 2026. Key Directives for KYC Update Notifications Consumer-Friendly Enhancements Implications These enhanced notification norms are designed to:

Context: In a rare and significant regulatory action, the Securities and Exchange Board of India (SEBI) has barred Sanjiv Bhasin, Director at IIFL Securities, from participating in the securities market for engaging in fraudulent front-running practices—a first involving a high-profile research analyst. Key Findings by SEBI Nature of Violation Stocks Involved

Context: The Supervisory Data Quality Index (sDQI) for Scheduled Commercial Banks (SCBs) improved marginally to 89.3 in March 2025, up from 88.6 in March 2024, according to the Reserve Bank of India (RBI). The sDQI evaluates the accuracy, timeliness, completeness, and consistency of supervisory returns submitted by banks to the RBI. Scoring Benchmarks The RBI classifies sDQI scores into the following categories: Segment-wise Performance in March 2025 Coverage and Scope TET

Context: The Reserve Bank of India (RBI) has released draft guidelines aimed at reducing the compliance burden and enhancing transparency in the reporting of rupee interest rate derivatives. The proposed framework seeks to align domestic reporting practices with global standards while providing greater operational flexibility to market participants. Key Objectives Understanding Interest Rate Derivatives Interest rate derivatives are financial instruments whose value is derived from: Key Functions of Interest Rate Derivatives: Proposed Reporting Reforms