Policy Action Purpose of Policy Action: Explanation of Key RBI Rates Rate Current Level Function Repo Rate 5.25% Rate at which RBI lends to commercial banks; cuts stimulate growth SDF Rate 5.00% Rate at which banks deposit surplus funds with RBI without collateral MSF Rate 5.50% Overnight borrowing rate for banks in urgent need; last-resort facility Bank Rate 5.50% Long-term lending rate of RBI; benchmark for other interest rates Fixed Reverse Repo Rate 3.35% Rate at which RBI borrows from banks; helps manage liquidity

Source: BL Overview Key Features

Source: Mint Context: On 8 December 2025, the Securities and Exchange Board of India (SEBI) launched the Past Risk and Return Verification Agency (PaRRVA) to curb mis-selling of financial products and enhance supervision of intermediaries, including social media “finfluencers.” About PaRRVA: Key Features: Significance: Background:

Source: Mint Context: On 8 December 2025, the Securities and Exchange Board of India (SEBI) issued a circular formalising the process for existing Alternative Investment Funds (AIFs) to convert into Accredited Investor-only funds (AI-only funds) or Large Value Funds (LVFs). The move follows amendments to the SEBI (AIF) Regulations, 2012, notified on 19 November 2025. Key Highlights of the Circular: About LVFs and AI-only Funds: Significance:

Source: Mint Context: The Reserve Bank of India (RBI) has introduced stricter norms for foreign banks operating in India by tightening exposure rules under the Large Exposures Framework (LEF). The amendments aim to curb concentration risk, ensure greater transparency, and strengthen the risk management practices of foreign lenders. Key Changes: No More Exemptions for Overseas Branch Exposures Stricter Intragroup Exposure Rules Gross Basis Calculation for All Transactions Effective Date and Early Adoption Why RBI Tightened the Rules

Source: BS Context: Following the RBI’s repo rate cut of 25 bps in December 2025, scheduled commercial banks are expected to experience further compression in Net Interest Margins (NIMs). This comes amid a high credit-deposit (CD) ratio and slower adjustment of deposit rates compared to lending rates. Net Interest Margins (NIMs) Net Interest Margin (NIM) is a key financial metric used in banking that measures how profitable a bank is in terms of generating income from its lending activities relative to the interest it pays on deposits and borrowings. It tells how effectively a bank is earning from its core business — lending and investing, compared to what it pays out as interest to depositors and lenders. Formula NIM = (Interest Earned – Interest Expended) ÷ Average Interest-Earning Assets × 100 Why NIMs Matter 1. Indicator of Bank Profitability Higher NIM means the bank earns more margin from lending versus what it pays on deposits. 2. Reflects Efficiency of Banking Operations Shows how well a bank manages its interest rate risk, asset–liability mix, and pricing strategy. 3. Impacts Overall Net Profit A bank with stronger NIMs usually reports better Net Interest Income (NII) and stronger bottom-line growth.

Source: BS Context: Fino Payments Bank Ltd. has received ‘in-principle’ approval from the Reserve Bank of India (RBI) to convert into a Small Finance Bank (SFB). First Payments Bank to Secure SFB Conversion Nod What Conversion to SFB Enables After full authorization, Fino will be able to: Eligibility to Become a Small Finance Bank (SFB) As per RBI’s “on-tap” licensing guidelines, the following criteria must be met: 1. Existing Entity Requirements 2. Operations & Compliance Track Record 3. Capital Requirements 4. Priority Sector & Financial Inclusion Focus 5. Branch Expansion Rules