INDIAN BANKING RADAR (IBR) - BANKING & ECONOMY INTELLIGENCE BULLETIN

🔥 PLATINUM CURRENT-AFFAIRS EDITION

VOL. 173 | 20 SEPTEMBER 2026 | SUNDAY

🏦 RBI • KYC • LIQUIDITY • UPI • FINTECH • NBFCs • IBC • COOPERATIVE BANKING • DCCB • PACS • ECONOMY

━━━━━━━━━━━━━━━━━━━━━━

🔥 TODAY'S BANKING RADAR

🔐 RBI EXTENDS OVERSEAS KYC CERTIFICATION FACILITY TO FPIs

💧 ₹50,000-CRORE OMO TRANCHE ABSORBS LIQUIDITY

💳 UPI MDR FRAMEWORK FROM 15 OCTOBER

🔗 DEMAT 2.0: TOKENISED CORPORATE BONDS + e₹

🌾 NABARD STRENGTHENS COOPERATIVE CAPITAL FRAMEWORK

🏦 BANKING-SERVICE CONTINGENCY PLANNING FOR PROPOSED STRIKE

IBR VALUE-ADD

NEWS → FACT → CONCEPT → BANKING IMPACT → EXAM ANGLE

━━━━━━━━━━━━━━━━━━━━━━

🔐 1. RBI EXTENDS OVERSEAS KYC CERTIFICATION FACILITY TO FPIs

RBI's 18 September 2026 amendment to the KYC Directions extends the existing overseas certified-copy facility available to NRIs and PIOs to Foreign Portfolio Investors (FPIs).

For eligible non-resident customers, banks may alternatively obtain an original certified copy certified by specified authorities abroad.

The amendment is effective immediately.

SIX PERMITTED CERTIFYING AUTHORITIES

Authorised officials of overseas branches of Scheduled Commercial Banks registered in India

Branches of overseas banks having relationships with Indian banks

Notary Public abroad

Court Magistrate

Judge

Indian Embassy / Consulate General

🧠 EXAM TRAP

This is a documentation/certification facilitation — NOT a relaxation of KYC, AML or CFT requirements.

IBR FACT: FPI has been newly added to the overseas certified-copy facility.

━━━━━━━━━━━━━━━━━━━━━━

💧 2. RBI OMO SALE — LIQUIDITY ABSORPTION

Under RBI's ₹1 lakh crore OMO sale programme, the first tranche involved:

• ₹50,000 crore notified • ₹66,590 crore bids received • ₹50,000 crore accepted • Settlement: 18 September

Remaining scheduled tranches:

• ₹25,000 crore — 21 September • ₹25,000 crore — 28 September

The first auction attracted bids exceeding the notified amount, with RBI accepting ₹50,000 crore.

CORE CONCEPT

OMO SALE

RBI sells Government securities

↓

Funds move from banking/financial system to RBI

↓

Liquidity ↓

OMO PURCHASE

RBI buys Government securities

↓

Funds enter banking system

↓

Liquidity ↑

⚠️ EXAM TRAP

OMO Sale ≠ liquidity injection

━━━━━━━━━━━━━━━━━━━━━━

💧 3. VRRR + OMO — HOW RBI MANAGES SURPLUS LIQUIDITY

RBI has also been using Variable Rate Reverse Repo (VRRR) operations to absorb surplus liquidity.

A recent VRRR auction absorbed about ₹2.40 lakh crore, highlighting the continuing liquidity-surplus environment.

TWO DIFFERENT TOOLS

OMO Sale → relatively durable liquidity absorption through securities transactions

VRRR → temporary liquidity absorption through banks placing funds with RBI

IBR MASTER CONNECTION

FCNR(B) / capital flows

↓

Banking-system liquidity

↓

Surplus liquidity

↓

VRRR + OMO

↓

Money-market conditions

↓

Monetary-policy transmission

🧠 EXAM FACT

VRRR = Variable Rate Reverse Repo

━━━━━━━━━━━━━━━━━━━━━━

💵 4. FCNR(B) MOBILISATION — WHY BANKERS SHOULD CONNECT IT WITH LIQUIDITY

The special FCNR(B) mobilisation window closed on 31 August 2026.

However, the resulting foreign-exchange and banking-system effects remain relevant to liquidity management.

TRANSMISSION

FCNR(B) mobilisation

↓

Foreign currency inflow

↓

FX/RBI operations

↓

Rupee-liquidity effects

↓

System liquidity

↓

RBI absorption operations

🧠 IBR CONCEPT

External-sector flows can influence domestic liquidity conditions.

FCNR(B) = Foreign Currency Non-Resident (Bank)

━━━━━━━━━━━━━━━━━━━━━━

💳 5. UPI MDR — WHAT CHANGES FROM 15 OCTOBER?

The revised MDR framework for specified merchant transactions is scheduled to take effect from 15 October 2026.

STANDARD SPECIFIED P2M CATEGORY

Transaction above ₹2,000 → 0.4% MDR

For specified transactions of ₹75,000 and above:

Maximum MDR → ₹300

Other specified categories have separate MDR treatment.

⚠️ MOST IMPORTANT EXAM POINT

₹2,000 is an MDR applicability threshold — NOT a UPI transaction limit.

WHAT DOES NOT MEAN “UPI WILL BECOME CHARGEABLE”?

The framework does not mean that every UPI transaction will attract a customer fee.

P2P transactions remain outside the merchant MDR framework, while specified small-merchant arrangements continue to receive zero-MDR treatment.

🧠 IBR FORMULA

UPI transaction ≠ automatically chargeable transaction

━━━━━━━━━━━━━━━━━━━━━━

🧾 6. MDR ≠ TAX

MDR = Merchant Discount Rate

It is a payment-ecosystem charge.

Therefore:

❌ MDR ≠ GST

❌ MDR ≠ Government tax

❌ MDR ≠ automatic customer UPI charge

The applicable MDR is part of the payment ecosystem's commercial framework.

⚠️ EXAM TRAP

Do NOT write:

“0.4% UPI tax.”

Correct:

“Specified P2M transactions above ₹2,000 may attract applicable MDR from 15 October 2026.”

━━━━━━━━━━━━━━━━━━━━━━

🔗 7. DEMAT 2.0 — TOKENISED CORPORATE BONDS

SEBI announced the successful launch of the Demat 2.0 pilot project for Tokenised Corporate Bonds on 10 September 2026.

Reported pilot issuances:

• REC — ₹500 crore • L&T — ₹500 crore • IIFL Finance — ₹25 crore

TOTAL

₹1,025 CRORE

TECHNOLOGY ARCHITECTURE

Tokenised corporate bond

↓

Distributed Ledger Technology

↓

Digital money / wholesale e₹ settlement

↓

Simultaneous settlement

WHY IT MATTERS

Tokenisation can transform:

• Securities issuance • Ownership records • Settlement • Operational processes • Market infrastructure

But it does NOT automatically eliminate:

❌ Credit risk

❌ Market risk

❌ Liquidity risk

❌ Operational risk

❌ Cyber risk

🧠 EXAM FORMULA

Tokenisation = infrastructure innovation, not risk elimination

━━━━━━━━━━━━━━━━━━━━━━

🏦 8. RBI ACTION ON NBFCs

RBI has announced regulatory actions involving NBFC registrations.

5 NBFCs

➡️ Certificates of Registration cancelled

8 NBFCs

➡️ Certificates of Registration surrendered and subsequently cancelled

Reasons can include exit from NBFI business, restructuring/merger, dissolution or other applicable regulatory circumstances.

⚠️ EXAM TRAP

CoR cancellation does not automatically mean regulatory punishment.

The reason and regulatory context matter.

━━━━━━━━━━━━━━━━━━━━━━

⚖️ 9. IBBI — DUE DILIGENCE AGAINST IBC MISUSE

IBBI issued a circular dated 9 September 2026 titled:

“Due diligence by Insolvency Professionals regarding misuse of IBC framework.”

The measure focuses on strengthening due diligence where the IBC framework may be misused.

EXAM CONNECT

IBC → Insolvency and Bankruptcy Code

Section 65 → Fraudulent or malicious initiation of insolvency proceedings

🧠 IBR FORMULA

IBC

Due diligence

Regulatory safeguards

= Credible insolvency ecosystem

━━━━━━━━━━━━━━━━━━━━━━

🌾 10. NABARD — CAPITAL STRENGTHENING OF COOPERATIVE CREDIT INSTITUTIONS

NABARD's 8 September 2026 operational guidelines concern long-term loans to State Governments under Section 27 of the NABARD Act, 1981 for contribution to the share capital of cooperative credit institutions.

Covered institutions include:

🏦 State Cooperative Banks

🏦 DCCBs

🌾 PACS / FSS / LAMPS

🏦 SCARDBs

🏦 PCARDBs

WHY CAPITAL CONTRIBUTION MATTERS

State Government share-capital contribution

↓

Owned funds ↑

↓

Maximum Borrowing Power ↑

↓

Lending capacity ↑

↓

Agricultural & rural credit ↑

🧠 EXAM FACT

Section 27 of the NABARD Act is an important statutory link between NABARD's long-term lending support to State Governments and strengthening the share capital of eligible cooperative credit institutions.

━━━━━━━━━━━━━━━━━━━━━━

🌱 11. NATIONAL COOPERATION POLICY — SIX STRATEGIC PILLARS

The National Cooperation Policy framework is built around six strategic mission pillars:

1️.Strengthening the Foundation

Legal reforms • governance • finance • transparency

2️.Promoting Vibrancy

Markets • business opportunities • income enhancement

3️.Making Cooperatives Future-Ready

Technology • professional management • digitalisation

4️.Promoting Inclusivity & Deepening Reach

Members • women • youth • wider participation

5️.Entering New & Emerging Sectors

Clean energy • warehousing • healthcare • new activities

6️.Shaping the Young Generation

Training • skills • employment • youth participation

🧠 MEMORY CODE

F – V – F – I – N – Y

━━━━━━━━━━━━━━━━━━━━━━

🌾 12. PACS — FROM CREDIT SOCIETY TO MULTIPURPOSE RURAL INSTITUTION

TRADITIONAL ROLE

Agricultural credit

KCC-related services

Member services

EMERGING ROLE

Digital services

Storage

Procurement

Processing

Other rural economic activities

IBR MODEL

PACS

↓

Credit + Services

↓

Diversification

↓

Rural economic activity

⚠️ EXAM TRAP

PACS ≠ Bank

Rural cooperative credit structure:

PACS → DCCB → StCB

PACS are cooperative credit societies; DCCBs and StCBs constitute the banking tiers.

━━━━━━━━━━━━━━━━━━━━━━

💻 13. NEXT PHASE OF COOPERATIVE BANKING

Computerisation alone is not enough.

Future-ready cooperative banking requires:

• CBS / IT infrastructure • Digital credit • Cybersecurity • IT governance • Customer protection • Professional management • Internal controls

IBR MASTER CONCEPT

Technology + Governance + Supervision = Sustainable Cooperative Banking

Particularly relevant to:

🏦 StCBs

🏦 DCCBs

🌾 PACS

━━━━━━━━━━━━━━━━━━━━━━

🎯 CIVIL SERVICES QUICK CONNECT

GS-II

Financial regulation • KYC/AML • Digital governance • Cooperatives • Financial inclusion • Consumer protection

GS-III

Monetary policy • Liquidity management • Digital payments • FinTech • Capital markets • Banking regulation • IBC • Cybersecurity

MAINS PRACTICE

Q1. How can KYC documentation be simplified without weakening AML/CFT safeguards?

Q2. Why can large capital inflows create a liquidity-management challenge for a central bank?

Q3. How can India maintain UPI's inclusiveness while developing a sustainable digital-payment ecosystem?

Q4. “Tokenisation transforms financial-market infrastructure but does not eliminate financial risk.” Discuss.

Q5. Explain how capital strengthening, technology and diversification can strengthen cooperative credit institutions.

━━━━━━━━━━━━━━━━━━━━━━

📌 PRELIMS RAPID REVISION

🔐 18 Sept 2026 → RBI KYC Amendment Directions

🌐 FPI → Added to overseas certified-copy facility

6️⃣ 6 → Specified overseas certifying authorities

💧 ₹1 lakh crore → OMO sale programme

💰 ₹50,000 crore → First OMO tranche

💵 ₹66,590 crore → Bids received

🏦 ₹50,000 crore → Accepted

💧 VRRR → Variable Rate Reverse Repo

💳 15 Oct 2026 → UPI MDR framework commencement

0.4% → Standard specified P2M MDR above ₹2,000

₹300 → Cap for specified ₹75,000+ transactions

🔗 ₹1,025 crore → Reported Demat 2.0 issuances

₹500 crore → REC

₹500 crore → L&T

₹25 crore → IIFL Finance

🏦 5 → NBFC CoRs cancelled

🏦 8 → CoRs surrendered/cancelled

⚖️ 9 Sept 2026 → IBBI IBC misuse due-diligence circular

📜 Section 27 → NABARD Act cooperative-capital support

🌾 6 → National Cooperation Policy pillars

🌱 PACS → Grassroots cooperative credit institution

📈 Bond Price ↑ → Yield ↓

━━━━━━━━━━━━━━━━━━━━━━

🏦 BANKER'S TAKEAWAY

COMMERCIAL BANKERS

KYC • FPI • AML/CFT • Liquidity • G-Secs • Forex • UPI • Cybersecurity

DCCB / RURAL COOPERATIVE BANKERS

KYC • Governance • NABARD • Digital banking • Cybersecurity • Capital strengthening • PACS integration

PACS

Computerisation • KCC • Digital services • Storage • Procurement • Diversification

BANKING ASPIRANTS

RBI • KYC • Liquidity • UPI • FinTech • NBFCs • IBC • Cooperative Banking

CIVIL SERVICES ASPIRANTS

FACT → CONCEPT → CAUSE → IMPACT → POLICY → MAINS

━━━━━━━━━━━━━━━━━━━━━━

🚀 WHY FOLLOW IBR?

Most current-affairs platforms give you:

NEWS

IBR gives you:

NEWS + CONCEPT + BANKING IMPACT + EXAM ANGLE

📌 Daily Banking Intelligence

📌 RBI & Regulatory Updates

📌 IBPS PO/Clerk Preparation

📌 AFO & NABARD Preparation

📌 DCCB/PACS Knowledge

📌 Civil Services Radar

📌 Banking Concepts

📌 Current-Affairs Revision

READ → UNDERSTAND → CONNECT → REVISE → PREPARE

━━━━━━━━━━━━━━━━━━━━━━

▶️ IBR YOUTUBE CHANNEL

🎥 RBI & Liquidity

🎥 KYC & Banking Compliance

🎥 UPI & Digital Payments

🎥 Banking Fraud Awareness

🎥 FinTech & AI

🎥 Cooperative Banking

🎥 DCCB & PACS

🎥 Economy Concepts

🎥 Exam-Focused Banking Intelligence

🔔 SUBSCRIBE TO IBR YOUTUBE CHANNEL

━━━━━━━━━━━━━━━━━━━━━━

🌾 INDIAN BANKING RADAR (IBR)