This past week saw significant regulatory and judicial activity across multiple sectors, primarily impacting Income Tax, GST, Customs, DGFT, and RBI. In Income Tax, the Delhi High Court ruled that Long Term Capital Gains (LTCG) indexation starts from the Builder Buyer Agreement date, not provisional allotment, and that External Development Charges (EDC) paid to HUDA are not rent, thus not requiring TDS deduction under Section 194-I. For GST, a circular on supplier evidence for Section 15(3)(b)(ii) compliance was withdrawn, and instructions were issued for provisional sanction of 90% of GST refund claims for low-risk and inverted duty structure cases. AAAR rulings denied Input Tax Credit (ITC) on share buyback expenses but upheld ITC eligibility for power line capital goods outside the factory. The Supreme Court upheld Service Tax on export cargo handling by the Airports Authority of India. Customs announced exemptions on duties and cesses for imports from Switzerland, Norway, and Iceland under the new India-EFTA TEPA rules, and fixed tariff values for edible oils, gold, and silver. The DGFT extended the RoDTEP Scheme for exports until March 31, 2026, and permitted the export of several agricultural commodities to Bhutan free from restrictions. Finally, the RBI tightened rules on lending against gold and silver, restricted the use of Special Rupee Vostro Accounts for investing in corporate debt securities, and proposed draft directions to simplify Basic Savings Bank Deposit (BSBD) Account operations.
Notifications & Circulars issued during week (29th – 5th Oct 2025)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
HC, LTCG Indexation starts from Builder Buyer Agreement, Not Provisional Allotment: Case of Praveen Gupta vs DCIT, HC Delhi judgement Dated 11th September 2025. HC ruled regarding calculation of Long Term Capital Gains (LTCG) for residential property sales, affirming that the benefit of cost indexation can be claimed only from the date of the formal Builder Buyer Agreement (BBA), and not from the date of initial payment or provisional allotment.
HC, EDC Charges to HUDA are not Rent, No TDS Required: Case of CIT (TDS) vs SS Group Pvt Ltd, HC Delhi judgement Dated 18thAugust 2025. HC dismissed the Revenue appeal, affirming that External Development Charges (EDC) paid by a real estate developer to the Haryana Urban Development Authority (HUDA) are not “rent” and do not attract the obligation to deduct Tax Deducted at Source (TDS) under Section 194−I of the Income Tax Act.
B. GST
Withdrawal of circular No. 212/6/2024-GST: The circular 212/204 dated 26th June 2024 provide clarifications in relation to mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) by the suppliers. The circular has been withdrawn and the procedure prescribed therein for providing evidence of compliance of conditions shall not be required.
(Link: CGST Circular 253/2025 Dated 01/10/2025)
Provisional sanction of refund claims on the basis of identification and evaluation of risk by the system: The instructions outlines the procedure for the provisional sanction of GST refund claims based on system-identified risk. An amendment to rule 91(2), allows for the provisional sanction of 90% of the claimed refund for zero-rated supplies in cases categorized by the system as “low- risk.” The proper officer must adhere to existing timelines for acknowledgment and can sanction the 90% provisional refund without further scrutiny for these low-risk cases. Refund applications not flagged as “low-risk” will undergo detailed scrutiny without provisional sanction. The instruction also extends this risk-based provisional sanction of 90% of the claimed amount to refunds filed on account of inverted duty structure (IDS).
(Link: CGST instruction 06/2025 Dated 03/10/2025)
AAAR, Mutual Fund redemption treated as Sale, ITC reversal rules Apply: Case of Zydus Lifesciences Ltd, AAAR Gujarat Ruling Dated 22nd September 2025. The Appellate Authority upheld the ruling of the AAR on the issue of input tax credit (ITC) availability in respect of common inputs and input services used for subscription and redemption of mutual fund units.
AAAR, GST ITC Denied on Expenses for Company Share Buyback: Case of Gujarat Narmada Valley Fertilizers & Chemicals Ltd, AAAR Gujarat Ruling Dated 22nd September 2025. The Appellate Authority upheld a previous ruling that denied Input Tax Credit (ITC) on expenses incurred by a company for the buyback of its own shares. The AAAR concluded that a transaction in shares, which are classified as securities, falls outside the scope of supply of goods or services.
AAAR upholds ITC Eligibility for Power Line Capital Goods Outside Factory: Case of Asstt Comm CGST & CE vs Elixir Industries, AAAR Gujarat Ruling Dated 22nd September 2025. The Appellate Authority held that the Elixir is eligible to claim ITC on the capital goods in the form of wires/cables and electrical equipment. It observed that there are no such rules that restrict the ITC benefit. It upheld the ruling of AAR and rejected the revenue’s appeal.
AAAR, Rapigro is a Plant Growth Regulator under HSN 38089340, upholds 18% GST Rate: Case of Jivagro Limited, AAAR Gujarat Ruling Dated 22nd September 2025. AAAR ruled that the classification of Rapigro under the Customs Tariff Act, and under the CGST Act, will be under 3808 93 40, as a ‘plant growth regulator’. The rate of tax applicable on Rapigro is 18% as per serial number 87, Schedule III of notification No. 1/2017 dated 28th June 2017.
SC upholds Service Tax on Export Cargo Handling by Airports Authority: Case of Airports Authority of India vs Commissioner Service Tax, SC Judgement Dated 23rd September 2025. The apex court dismissed an appeal by the Airports Authority of India (AAI), upholding the levy of service tax on its cargo handling services.
SC, Notification exempting VAT on sale of asbestos cement sheets and bricks quashed: Case of UP Asbestos Ltd vs State of Rajasthan, SC Judgement Dated 24th September 2025. The apex court held that notification dated 9th March 2007 issued by the Government of Rajasthan under section 8(3) of Rajasthan Value Added Tax Act, granting exemption from payment of VAT on sale of asbestos cement sheets and bricks manufactured in the state of Rajasthan is violative of Article 304(a) of the Constitution of India and hence quashed.
HC, ITC Refund cannot Be denied despite BRC mismatch with Export details: Case of Transformative Learning Solutions Pvt Ltd vs Comm SGST, HC Delhi judgement Dated 24th September 2025. HC held that ITC refund cannot be denied just because BRC copies are not matching with Export details. It held that, so long as full proceeds for export has been realized, refund of ITC cannot be denied.
C. Central Excise
No Notification/ Circular during the Week.
D. Custom Duty
India Exempts Customs Duty and Cesses on Imports from Switzerland: The notification has introduced a customs duty exemption on specified goods imported into India from Switzerland, provides relief regarding basic Customs Duty, the Agriculture Infrastructure and Development Cess (AIDC), and the Health Cess. A critical condition for availing this reduced duty is the requirement for the importer to prove, to the satisfaction of the relevant Customs officer, that the imported goods genuinely originate from Switzerland.
(Link:Customs Notification 41/2025 (T) Dated 30/09/2025)
India Exempts Customs Duty and Cesses on Imports from Norwey: The notification has introduced a customs duty exemption on specified goods imported into India from Norwey, provides relief regarding basic Customs Duty, the Agriculture Infrastructure and Development Cess (AIDC), and the Health Cess. A critical condition for availing this reduced duty is the requirement for the importer to prove, to the satisfaction of the relevant Customs officer, that the imported goods genuinely originate from Norwey.
(Link: Customs Notification 42/2025 (T) Dated 30/09/2025)
India Exempts Customs Duty and Cesses on Imports from Iceland: The notification has introduced a customs duty exemption on specified goods imported into India from Iceland, provides relief regarding basic Customs Duty, the Agriculture Infrastructure and Development Cess (AIDC), and the Health Cess. A critical condition for availing this reduced duty is the requirement for the importer to prove, to the satisfaction of the relevant Customs officer, that the imported goods genuinely originate from Iceland.
(Link: Customs Notification 43/2025 (T) Dated 30/09/2025, Corrigendum 01/102025)
Common Adjudicating Authority appointed for Massimo Dutti Customs Notices: CBIC has appointed the Principal Commissioner/Commissioner of Customs, ACC (Import), New Delhi, as Common Adjudicating Authority for specific Customs show cause notices (SCNs) issued to M/s. Massimo Dutti India Pvt Ltd by different Customs authorities in various locations, including New Delhi, Mumbai, and JNCH.
(Link: Customs Notification 58/2025 (NT) Dated 26/09/2025)
India notifies Rules for EFTA Trade Agreement Origin of Goods: The notification introduce the Customs Tariff (Determination of Origin of Goods under the Trade and Economic Partnership Agreement between India and the EFTA States) Rules 2025. These rules establish the legal framework for determining whether goods imported into India from the EFTA States (Iceland, Liechtenstein, Norway, and Switzerland) qualify for preferential tariff treatment under the new Trade and Economic Partnership Agreement (TEPA). The rules define a product as originating if it is wholly obtained in a Party or if non-originating materials undergo sufficient working or processing as detailed in Annexure-A, with a de minimis tolerance of 10% of the FOB or ex-works price for non-originating materials.
(Link: Customs Notification 59/2025 (NT) Dated 29/09/2025)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 1st October 2025. The tariff value for crude palm oil is set at USD 1108 per metric ton, while gold and silver have tariff values of USD 1231 per 10 grams and USD 1515 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7463 per metric ton.
(Link: Customs Notification 60/2025 (NT) Dated 30/09/2025)
Amendment to Sea Cargo Manifest and Transhipment Regulations: The Notification amends the TABLE following FORM-XII. The key change is the substitution of the deadline against Sr No 6 in column (3) of the TABLE, which is now extended to 31st December 2025.
(Link:Customs Notification 61/2025 (NT) Dated 30/09/2025)
CBIC Appoints NCTC-Pax Head as All-India Customs Head: The Principal Additional Director General or the Additional Director General of the National Customs Targeting Centre-Passenger (NCTC- Pax) is appointed as an officer of customs, specifically holding the rank and all powers of a Principal Commissioner or Commissioner of Customs. This appointment grants the officer jurisdiction over the whole of India. The primary function assigned to this officer is the receiving and processing of Passenger Name Record (PNR) information under the Passenger Name Record Information Regulations.
(Link: Customs Notification 62/2025 (NT) Dated 01/10/2025)
CBIC Amends Notification 26/2022 on Officer Seizure Power: The Notification amend the principal notification 26/2022 dated 31st March 2022, specifically alters the Table in the original notification at serial numbers 6 and 7. For Intelligence Officers of the Directorate General of Revenue Intelligence (Serial No. 6) and for Examiners, Preventive Officers, or Inspectors of the Central Excise Department posted at customs locations (Serial No. 7), the relevant powers are revised to cover sub-sections (1), (3), and (5) of section 110 of the Customs Act.
(Link: Customs Notification 63/2025 (NT) Dated 01/10/2025)
E. Directorate General of Foreign Trade (DGFT)
Extension of RoDTEP Scheme for DTA Units and its applicability to DTA/AA/SEZ/EOU Exports: DGFT has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme beyond its previous deadline of 30th September 2025 until 31st March 2026. This extension covers exports made from a range of units, including Domestic Tariff Area (DTA) units, Advance Authorisation (AA) holders, Special Economic Zone (SEZ) units, and Export Oriented Units (EOUs). The existing RoDTEP rates, along with any applicable per-unit value caps, will continue to apply for all export items, and the scheme’s operation will remain subject to the specified budgetary framework.
(DGFT Notification 35/2025 Dated 30/09/2025)
Exemptions for Export of Agricultural Commodities to Bhutan: Exports of the agricultural commodities as specified, to Bhutan are exempted from the applicable restrictions and prohibitions, with immediate effect and until further orders. The exempted list is extensive, covering twenty-three categories of agricultural goods, including various forms of milk and cream, fresh vegetables like potatoes, tomatoes, onions, and shallots, lentils, tea, different types of wheat and rice, wheat/meslin flour, a wide range of edible oils (including soyabean, ground- nut, palm, and mustard oil), sugar and molasses, and common salt.
(DGFT Notification 36/2025 Dated 03/10/2025)
Amendment in Export Policy of De-Oiled Rice Bran: The export policy of De-Oiled Rice Bran (DoRB) is hereby amended from `Prohibited’ to `Free’. The export policy for DoRB across all relevant codes, including those concerning bran, sharps, and oil-cake residues, is now uniformly classified as Free.
(DGFT Notification 37/2025 Dated 03/10/2025)
Export of 100 MT of wheat seed from University of Dharwad to Indonesia: DGFT has permitted export of 100 Metric Tonnes (MT) of a specific variety of wheat seed, DWR-162 from the University of Dharwad in India to Indonesia. The transaction must be facilitated through the National Co-operatives Export Limited (NCEL) and shipped via the Mangalore Sea Port. Further, the University of Dharwad is designated as the authorized agency responsible for certifying the identity and quantity of the DWR-162 wheat seed before its export.
(DGFT Notification 38/2025 Dated 03/10/2025)
Exemptions from requirement of COI for export of Rice to European countries: DGFT has amended the export policy for Basmati and Non-Basmati Rice modifying the requirement for a mandatory Certificate of Inspection (COI). It mandates that rice exports to specific European nations, namely EU Member States, the United Kingdom, Iceland, Liechtenstein, Norway, and Switzerland, must still obtain a COI from the Export Inspection Council (EIC) or an Export Inspection Agency (EIA). However, for exports destined for the remaining European countries, the requirement for a COI from the EIC/EIA has been temporarily exempted for a period of six months, until April 2, 2026.
(DGFT Notification 39/2025 Dated 03/10/2025)
DGFT amends End-User Certificate Rules for Restricted Imports: Earlier, Regional Authorities (RAs) could issue end-user certificates (EUC) only for freely importable items if required by a foreign government before permitting export from their country. The revised provision now extends this facility to both free and restricted items. Para 2.35 of the Handbook of Procedures, has been amended to provide that the Regional Authorities (RAs) are authorised to issue an End-User Certificate (EUC) for restricted import items also in accordance with the restricted authorisation granted by DGFT.
(DGFT Public Notice 23/2025 Dated 01/10/2025)
Extension for filing Annual RoDTEP Returns: The deadline for the submission of the Annual RoDTEP Returns (ARR) for the Financial Year 2023-24 has been extended from 30th September 2025, to 30th November 2025. Exporters can now file their mandatory Annual RoDTEP Return for the stipulated financial year up to the new date by paying a composition fee of Rs 10,000.
(DGFT Public Notice 24/2025 Dated 03/10/2025)
India-EFTA TEPA e-CoO Filing Starts 1st October 2025: DGFT has announced the electronic filing and issuance of Preferential Certificates of Origin (CoO) for exports under the India- European Free Trade Association Trade and Economic Partnership Agreement (India-EFTA TEPA), effective 1st October 2025. This process, covering exports to Iceland, Liechtenstein, Norway, and Switzerland, will be executed via the Trade Connect e-Platform (www.trade.gov.in). The e-CoO can be issued through two methods: self-declaration or by an authorized agency.
(DGFT Trade Notice 13/2025 Dated 30/09/2025)
F. Securities and Exchange Board of India (SEBI)
Extension of Algo Trading implementation timeline till April 2026: SEBI has extended the timeline for the complete implementation of its framework for the safer participation of retail investors in algorithmic (Algo) trading. While stock brokers ready with the necessary systems may proceed with implementation starting 1st October 2025, a glide path has been introduced for those needing more time due to recent clarifications in operational modalities. It sets out three key milestones, Milestone 1- registration applications for retail algo products and at least one strategy must be submitted by 31st October 2025, Milestone 2- registration completion by 30th November 2025, Milestone 3- mandatory participation in a mock session with new functionality by 3rd January 2026.
(Link: SEBI Circular Dated 30/09/2025)
G. Ministry of Corporate Affairs (MCA)
Amendment to IEPFA Accounting, Audit, Transfer and Refund Rules: The notification amends Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016. It substitutes Form IEPF-5 (Application to the Authority for claiming unpaid amounts and shares out of Investor Education and Protection Fund).
(Link:MCA Notification Dated 01/10/2025)
MCA extends DIR-3-KYC filing deadline without fee to 15th October 2025: MCA has announced an extension for filing the annual KYC forms for Directors. The deadline for filing e-form DIR-3 KYC and the corresponding web form DIR-3 KYC-WEB without the imposition of a fee has been extended from the previous date of 30th September 2025, to 15th October 2025.
(Link: MCA General Circular 04/2025 Dated 22/09/2025)
H. Insolvency and Bankruptcy Board of India (IBBI)
NCLAT, Order directing vacation of premises granted under leave & licence agreements by Corporate Debtor upheld: Case of Shanod Sameer vs Pankaj Bhattod, NCLAT Delhi Judgement Dated 22nd September 2025. The appellate tribunal held that order directing vacation of premise granted under leave and licence agreements granted by Corporate Debtor due to CIRP is justifiable. Accordingly, order is upheld and additional time granted to vacate the premises.
NCLAT Allows restoration of IBC case despite Revival Clause absence in Settlement: Case of Dnyaneshwaer Shankar Unde vs Shukla Dairy Pvt Ltd, NCLAT Delhi Judgement Dated 22nd September 2025. The appellate tribunal set aside an order passed by the NCLT which had refused to restore an admitted insolvency petition following a breach of settlement terms. It makes clear that when parties enter into a settlement during pendency of a CIRP, and later fail to honour the agreed terms, revival of insolvency proceedings cannot be denied merely due to absence of the specific revival clause.
NCLAT allowed majority shareholders to purchase company property after directors violated interim order restraining its sale: Case of Ashok Kumar Jain vs Manoj Kumar Gupta, NCLAT Delhi Judgement Dated 1st August 2025. The appellate tribunal dismissed an appeal filed by the minority shareholder group, upholding an earlier order by NCLT, which had allowed the majority shareholders to purchase the sole immovable property of the company, after minority group was found to have violated a prior interim order.
NCLAT, CIRP application under section 7 of IBC by security trustee after valid authorisation is duly admissible: Case of Deepak Raheja vs IDBI Trusteeship Services Ltd, NCLAT Delhi Judgement Dated 12th September 2025. The appellate tribunal held that application under section 7 of the Insolvency and Bankruptcy Code (IBC) filed by the security Trustee is duly admissible since application was filed after obtaining valid authorisation from the lender. Accordingly, the appeal is dismissed.
IBBI suspends registration of RV Chandran R, and orders Investigation over asset exclusion in Insolvency Case: The Disciplinary Committee (DC) findings include improper exclusion of assets in valuation report, undervaluation of land asset, revision of value relied on earlier legal opinion rather than most recent one, and non-compliance with IBC provisions. DC has suspended his registration for a period of two year. It also referred the matter regarding determination of Fair Value and Liquidation Value to Board for examination.
(Link: IBBI DC Order Dated 23/09/2025)
I. Reserve Bank of India (RBI)
Amendment to Rules on Loan Spreads and Fixed Rate Option: The amendment to RBI Interest Rate on Advances Directions, introduce changes concerning the spread components of interest rates and the floating interest rate reset on personal loans. First, the directions now permit banks to reduce other spread components for a loan category earlier than the previous three year period. Regarding Reset of Floating Interest Rate on EMI based Personal Loans, the earlier instruction requiring banks to provide the option to switch to a fixed rate during interest rate reset is now changed. Regulated Entities (REs) may, at their option, offer the borrower a choice to switch to a fixed rate based on their Board-approved policy.
(Link: RBI Notification 83/2025 Dated 29/09/2025)
RBI Tightens Rules on Lending Against Gold and Silver: The amendment to RBI Lending Against Gold and Silver Collateral Directions, relates to Paragraph 12 of the original directions. The amended provisions restrict lenders from granting any new advance or loan for the purchase of gold in any form (including ornaments, jewellery, or coins) or for the purchase of financial assets backed by gold or silver, such as Exchange- Traded Funds (ETFs) or Mutual Funds. It also explicitly prohibits loans against primary gold or silver and related financial assets. It, however, permits banks to extend need-based working capital finance to borrowers who use gold or silver as a raw material in their manufacturing or industrial process.
(Link:RBI Notification 84/2025 Dated 29/09/2025)
Revision of Eligible Limit for AT1 Perpetual Debt Instruments Overseas: Under the new Basel III Capital Regulations, Perpetual Debt Instruments (PDIs) issued in foreign currency or as rupee-denominated bonds overseas will now be eligible for inclusion in Additional Tier 1 (AT1) capital up to a maximum amount of 1.5 per cent of Risk Weighted Assets (RWAs), based on the latest available financial statements.
(Link: RBI Notification 85/2025 Dated 29/09/2025)
Revision of AT1 Capital Limits for Small Finance Bank (SFB) Perpetual Debt Instruments: These directions revise the eligible limit for including Perpetual Debt Instruments (PDIs) denominated in foreign currency or rupee denominated bonds overseas as part of a bank’s Additional Tier 1 (AT1) capital. RBI has now capped the inclusion of these PDIs in AT1 capital at a maximum of 1.5 per cent of the Risk Weighted Assets (RWAs), based on the latest available financial statements.
(Link: RBI Notification 86/2025 Dated 29/09/2025)
Revision of AT1 Capital Limits for Foreign Currency Perpetual Debt Instruments: The revision modifies the eligible limit for including certain Perpetual Debt Instruments (PDIs) in Additional Tier 1 (AT1) capital. Specifically, PDIs issued in foreign currency or as rupee-denominated bonds overseas are now eligible for inclusion in AT1 capital up to a maximum amount of 1.5 per cent of Risk Weighted Assets (RWAs), based on the latest available financial statements.
(Link: RBI Notification 87/2025 Dated 29/09/2025)
Merchanting Trade Transactions (MTT)– Review of time period for outlay of foreign exchange: At present, the time period for the foreign exchange outlay is capped at four months. Following a review aimed at allowing merchanting traders greater efficiency in managing their transactions, it has been increased from four months to six months.
(Link: RBI Notification 88/2025 Dated 01/10/2025)
EDPMS/IDPMS Rules simplified for Small-Value Trade Bills: The notification seeks to simplify the closure of entries in the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS), specifically targeting small-value transactions. It allows Authorised Dealer (AD) Category-I Banks to reconcile and close export and import entries valued at Rs 10 lakh per entry/bill or less based solely on a declaration provided by the concerned exporter or importer. it also permits banks to accept any reduction in the declared or invoice value for these bills based on the same self-declaration.
(Link:RBI Notification 89/2025 Dated 01/10/2025)
Investment in Corporate Debt Securities by Persons Resident Outside India through Special Rupee Vostro account: RBI has permitted persons resident outside India maintaining Special Rupee Vostro Accounts (SRVA) to invest their rupee surplus balances in a wider range of instruments. Previously, such balances could only be invested in Central Government Securities, including Treasury Bills. Under the new directive, non- residents can now also invest in non- convertible debentures (NCDs), bonds, and commercial papers issued by Indian companies.
(Link:RBI Notification 90/2025 Dated 03/10/2025)
International Trade Settlement in Indian Rupees (INR): RBI has allowed greater flexibility for investing surplus funds held in Special Rupee Vostro Accounts. Previously, the balance in these accounts, established for the International Trade Settlement in Indian Rupees (INR) scheme, could be used for investment in instruments like Government Treasury Bills and Government securities. This new direction permit AD banks to now also allow investment of surplus balances in non-convertible debentures/bonds and commercial papers issued by Indian companies.
(Link: RBI Notification 91/2025 Dated 03/10/2025)
Reserve Bank launches Scheme for Facilitating Accelerated Payout – Inoperative Accounts and Unclaimed Deposits: RBI has announced a Scheme for Facilitating Accelerated Payout – Inoperative Accounts and Unclaimed Deposits. It aims to reduce both the stock of existing unclaimed deposits and fresh accretion of flows to the Depositor Education and Awareness (DEA) Fund. It will run for a period of one year from 1st October 2025 to 30th September 2026.
(Link: RBI Press Release Dated 30/09/2025, Scheme)
Draft RBI Gold Metal Loans Directions: These directions aim to consolidate, harmonize, and update the regulatory framework for the Gold Metal Loan (GML) scheme, initially launched in 1998 for the jewellery industry. It organize GML into two categories: Import-linked GML (repayable only in cash, sourced from imported gold) and GMS-linked GML (repayable in gold or cash, utilizing gold sourced from the Gold Monetization Scheme). The RBI grants banks operational freedom to establish their own GML lending and risk management policies, including setting quantity limits. All GML exposures must be valued daily using LBMA gold prices and INR-USD reference rates for prudential purposes. The rules prohibit the borrower from selling or exporting the gold in raw form and require banks to monitor the end-use. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 29/09/2025, Draft Direction)
Draft Circular on Large Exposures Framework: The draft circular proposes amendments to the Large Exposures Framework (LEF) and the LEF-Credit Risk Mitigation (CRM) framework for foreign bank branches operating in India. Specifically, the exemption for intra-group exposures under the LEF is being removed, exposures of an Indian branch to its Head Office (HO) or any HO branch/subsidiary worldwide will no longer be excluded, meaning they must now comply with counterparty limits. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 29/09/2025, Draft Circular)
Draft Amendments to Directions on Credit Information Reporting: It require Credit Institutions (CIs) and Credit Information Companies (CICs) to update credit data on a weekly basis, covering full monthly files and incremental weekly data on accounts opened, closed, updated, or reclassified. CIs will also be required to report borrowers’ Central KYC (CKYC) numbers where available. The amendments mandate CICs to adopt uniform data validation, rejection reasons, online maintenance formats, and encryption standards to minimize inconsistencies. Data Quality Index (DQI) scores must be provided monthly across consumer, commercial, and microfinance segments. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 29/09/2025, Draft Circular)
Draft amendment to Guidelines on Management of Intragroup Transactions & Exposures: The circular explicitly states that an Indian bank’s exposures to its overseas branches and a foreign bank’s operating as a branch in India (FBB) to its Head Office or overseas subsidiaries are generally excluded from intra-group exposure limits, except for proprietary derivative transactions. The definition and computation method for exposure will now align with the Large Exposures Framework circular. The existing exposure limits, previously linked to ‘Paid-up Capital and Reserves,’ will be substituted with the ‘eligible capital base’ as defined in the Large Exposures Framework. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 29/09/2025, Draft Circular)
Draft Directions on Transaction Accounts: The draft directions primarily focus on Transaction Accounts for a range of regulated entities, including Commercial Banks, Small Finance Banks, Regional Rural Banks, Local Area Banks, various Co-operative Banks, and Payments Banks, indicating an intent to ease or modify existing stipulations to provide greater operational flexibility and enforce credit discipline. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 01/10/2025, Commercial, Small Finance, Regional Rural, Local Area, Urban Cooperative, Rural Cooperative, Payment Banks)
Draft RBI Basic Savings Bank Deposit (BSBD) Account Directions: The draft mandates that every bank must offer the BSBD account with certain minimum facilities free of charge, regardless of a minimum balance. These mandatory free services now explicitly include an ATM/Debit Card (with no annual fee), a cheque book with a minimum of 25 leaves per year, and internet/mobile banking. Critically, the directions specify that digital payment transactions (NEFT, RTGS, UPI, IMPS, etc.), excluding ATM use, will not be counted as one of the minimum four free monthly withdrawals, providing greater flexibility for account holders to engage in digital finance. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 01/10/2025, Draft Direction)
Draft Circular Proposes repeal of Large Borrower Credit Guidelines: The original guidelines were designed to curb concentration risk by disincentivizing large, highly leveraged borrowers from relying excessively on the banking system for incremental funding, thereby encouraging them to access market based resources. While repealing the circular, it concurrently advised Scheduled Commercial Banks to establish a suitable monitoring and risk management framework to track risks associated with ultra- large, excessively leveraged borrowers. The existing Large Exposures Framework must still be adhered to, ensuring that concentration risk remains managed at the individual bank level. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 01/10/2025, Draft Direction)
Draft FEMA Establishment in India of a branch or office Regulations: These regulations are intended to replace the existing 2016 framework under FEMA. The key proposed changes include relaxed eligibility criteria, a shift from prescriptive norms to a principle-based approach offering greater operational flexibility, and simplified procedures for closure of non- compliant or inactive offices. It outlines conditions under which a foreign entity (Entity Resident Outside India – EROI) may establish a branch or office, including mandatory approvals in sensitive sectors or when the applicant is from certain jurisdictions. Restrictions include prohibition on legal consultancy and commercial activity by liaison offices. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 03/10/2025, Draft Regulations)
Draft External Commercial Borrowing Framework under FEMA Borrowing and Lending Regulations: The key amendments include linking borrowing limits to the borrower’s net worth or a cap of USD 1 billion, except for entities regulated by a financial sector regulator. The framework simplifies end- use restrictions and the Minimum Average Maturity Period (MAMP) to three years, with a one-to-three-year maturity option up to USD 50 million for the manufacturing sector. It broadens the list of eligible borrowers and recognized lenders, requires the cost of borrowing to be market-determined, and maintains the prohibition on utilizing ECB funds for activities like real estate business (with specified exceptions), chit funds, or on-lending (with exceptions for RBI-regulated lenders). The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 03/10/2025, Draft Regulation)
Draft Directions on Related Party Lending issued for Regulated Entities: These draft directions apply to a wide array of Regulated Entities (REs), including Commercial Banks, Small Finance Banks, Cooperative Banks, NBFCs, and All India Financial Institutions. The key proposals include introducing scale-based materiality thresholds that mandate Board or Committee approval for related-party lending exceeding set limits. It also excludes Independent Directors of other banks from being considered ‘related persons,’ offers principle-based exemptions from Banking Regulation for specific loans, and mandates detailed supervisory reporting and disclosure requirements for all REs regarding related party transactions. The feedback/comments from stakeholders are invited.
(Link: RBI Press Release Dated 01/10/2025, Commercial, Small Finance, Regional Rural, Local Area, Urban Cooperative, Rural Cooperative, NBFC, All India Fin Institutions)
Withdrawal of Rs 2000 Denomination Banknotes Status: The Reserve Bank of India (RBI) had announced the withdrawal of Rs 2000 denomination banknotes from circulation vide Press Release dated 19th May 2023. These notes can be exchanged/ deposited/ send through India Post from any post office in the country, to any of the 19 RBI Issue Offices for credit to their bank accounts in India. The ₹2000 banknotes continue to be legal tender. The total value of Rs 2000 banknotes in circulation, which amounted to Rs 3.56 lakh crore, has declined to Rs 5884 crore as at the close of business on 30th September 2025. Thus, 98.35% of the banknotes has since been returned.
(Link: RBI Press Release Dated 01/10/2025)
J. Miscellaneous
Small Savings Schemes Interest Rates for October to December 2025: Ministry of Finance, has announced that interest rates on various Small Savings Schemes will remain unchanged for the third quarter of the financial year 2025–26, covering the period from 1st October 2025, to 31st December 2025. The scheme wise rates, notably the Savings Deposit remains at 4%, the Senior Citizen Savings Scheme holds steady at 8.2%, the Sukanya Samriddhi Yojana at 8.2%.
(Link: Fin Min Office Memo Dated 30/09/2025)
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Compiled by:- CMA Yash Paul Bhola, MBA, FCMA. Former Director (Finance), National Fertilizers Limited.
Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)
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