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 Fino’s Track Record What Conversion to SFB Will Enable After full authorization, Fino will be able to: Eligibility to Become a Small Finance Bank (SFB) Per RBI’s on-tap licensing guidelines (originally 2014, revised 2019, further updated as the RBI (Small Finance Banks – Licensing) Guidelines, 2025): 1. Eligible Entities 2. Operations & Compliance Track Record 3. Capital Requirements 4. Foreign Shareholding 5. Priority Sector & Financial Inclusion Focus (Revised Norms 6. Branch Expansion Rules 7. Other Key Conditions

Source: TNIE Context: The Life Insurance Corporation of India (LIC) has launched two new life insurance plans aimed at providing savings and risk coverage to individuals and their families. Key Features:

Source: Mint Context: The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points (bps) to 5.25%, citing a rare macroeconomic situation where growth is strong and inflation is exceptionally low. The move surprised sections of the market that expected the Monetary Policy Committee (MPC) to hold rates. Why the Repo Rate Was Cut 1. Benign and Rapidly Falling Inflation 2. Robust GDP Growth 3. Policy Space + Low Inflation = Opportunity Governor Sanjay Malhotra termed this a “rare goldilocks period” where inflation is low and growth is stable, enabling policy action to support momentum. Impact of the Repo Rate Cut 1. Impact on Banks 2. Impact on Borrowers 3. Impact on Economy 4. Impact on Inflation What is Repo Rate? Repo Rate is the rate at which the RBI lends short-term money to commercial banks against government securities. Why Repo Rate Matters What is Reverse Repo Rate? Reverse Repo Rate is the rate at which commercial banks park their surplus funds with RBI. Why It Matters