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Introduction

Global M&A activity in the financial services sector appears to have slowed, despite a strong start in 2024, in line with general market trends. The Financial Institutions Group (“FIG”) is experiencing a unique phase of consolidation, with deal values increasing despite a significant decline in deal volume. This trend can be seen in a 5% YoY rise in deal value and a 30% drop in volume in the first half of 2024[1], suggesting a shift towards larger, strategic mergers.[2]Continue Reading FIG Paper (No. 38): M&A in FIG Space: Recent Trends and Shifts

Introduction:

This FIG Paper highlights recent trends in enforcement actions of the Reserve Bank of India (“RBI”) against different financial institutions, which has seen a significant 88% rise since 2021.Continue Reading FIG Paper (No. 36 – Series 1): Analysing RBI’s Enforcement Trends (2022-24)

Acquisition of NBFC-MFIs by Banks: Key Considerations

Background

Banks in India are often on the look-out for potential acquisition opportunities to spur inorganic growth. While their strategic interests will determine their targets, in recent times, banks have been evaluating acquisition of non-banking financial companies (“NBFCs”) and more specifically micro-finance institutions (“MFIs”), which primarily cater to the rural and…

FIG Paper (No 35- Payments Series 3)– The new Draft Directions for Regulations of Payment Aggregator

Introduction:

In our previous two FIG Papers of PA/PG Framework (here) and (here), we shared our key learnings in connection with operations of payment aggregator and payment gateway guidelines issued by the Reserve Bank of India (“RBI”) on March 17, 2020 (as amended from time to time) (“PA/PG Guidelines”).Continue Reading FIG Paper (No 35- Payments Series 3)– The new Draft Directions for Regulations of Payment Aggregator

The Reserve Bank Of India Mandates Compounding For Issuance Of Partly Paid-Up Units By AIFs Prior To March 14, 2024

The Reserve Bank of India (“RBI”) vide its circular dated May 21, 2024 (“Circular”),[1] has required that issuance of partly paid-up units by Alternative Investment Funds (“AIFs”) to foreign investors prior to March 14, 2024, should be regularised through compounding under Foreign Exchange Management Act, 1999 (“FEMA”). Compounding by RBI is prescribed for the contravention of foreign exchange regulations as per Foreign Exchange (Compounding Proceedings) Rules, 2000, and involve payment of a fees. In many instances, compounding requires payment of a monetary penalty to RBI.Continue Reading The Reserve Bank Of India Mandates Compounding For Issuance Of Partly Paid-Up Units By AIFs Prior To March 14, 2024

INTRODUCTION

  • The Reserve Bank of India (“RBI”) has published the “Guidelines on Voluntary transition of Small Finance Banks to Universal Banks” dated April 26, 2024 (“SFB Guidelines 2024”), setting out the glide path for voluntary transition of Small Finance Banks (“SFBs”) to universal banks (“Universal Banks”) in terms of:
    • Guidelines for “on-tap” Licensing of Small Finance Banks in Private Sector dated December 5, 2019 (“SFB Guidelines 2019”);
    • Guidelines for “on tap” Licensing of Universal Banks in the Private Sector dated August 1, 2016 (“Universal Bank Guidelines”);
    • Reserve Bank of India (Acquisition and Holding of Shares or Voting Rights in Banking Companies) Directions, 2023 dated January 16, 2023 (“Acquisition Directions 2023”); and
    • Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies dated January 16, 2023 (“Acquisition Guidelines 2023”).

Continue Reading SFB to Universal Bank – New Glide Path

This post analyses the permissibility of and key legal considerations for share-based benefits/ incentives, like ESOPs, RSUs, SARs, etc., that foreign companies offer to the employees of their Indian group companies.Continue Reading Employee Share-based Incentives by foreign companies for employees of group companies in India: Should it be an ESOP, RSU, ESPS, SAR or Phantom Stock?

FIG Paper (No. 34 – Data Law Series 5) Balancing Sectoral Regulation and DPDP Act Compliance by NBFCs & Fintechs

Background

Indian regulators in recent times have shown a keen interest in monitoring the intersection between data, information technology, and cybersecurity with regulated entities—more so in relation to Non-Banking Financial Companies (“NBFCs”) and ‘fintechs’. With the expected enforcement of the Digital Personal Data Protection Act, 2023 (“DPDP Act”), and the promulgation of its rules, it becomes imperative for NBFCs and fintechs to map their journey of compliance from legal and regulatory perspectives.Continue Reading FIG Paper (No. 34 – Data Law Series 5) Balancing Sectoral Regulation and DPDP Act Compliance by NBFCs & Fintechs

FIG Paper (No. 32) - Outsourcing of Financial Services: Harmonising the Law and Looking Ahead

Background

The Reserve Bank of India (“RBI”) issued the draft Master Direction – Reserve Bank of India (Managing Risks and Code of Conduct in Outsourcing of Financial Services) Directions, 2023 (“Draft MD”), on October 26, 2023. With the COVID-19 pandemic and the digitisation of financial services globally, financial institutions started becoming increasingly dependent on their service partners and agents to reduce costs and avail expertise not available internally.Continue Reading FIG Paper (No. 32 – Series 1): Outsourcing of Financial Services: Harmonising the Law and Looking Ahead