In today’s edition of our monthly wrap, we cover the key highlights in the BFSI sector for March 2025 across the following sub-verticals:  

1.       Banks and NBFCs 

2.       Broking and Capital Markets 

3.       Cards and Payments

4.       Insurance 

Banks and NBFCs:

• Several banks, including SBI, IDBI Bank, Indian Bank, HDFC Bank, and Punjab & Sind Bank, are offering special FDs with rates up to 8.05% for super senior citizens. These limited-period schemes provide higher returns than regular FDs, catering to general investors, senior citizens, and super senior citizens with varying rates based on tenure
  

• RBI conducted a US$ 10B FX swap auction in Mar’25 to boost rupee liquidity, attracting US$ 22.2B in bids—more than twice the offer. The cut-off premium was set at INR 5.8, lower than the previous INR 6.55. This move helps address the banking system’s liquidity deficit, which stood at INR 2T (US$ 23.2B) last week
  

• The RBI has imposed monetary penalties on HDFC Bank and Punjab & Sind Bank for regulatory non-compliance. HDFC Bank faces an INR 75L fine for failing to adhere to KYC norms. Punjab & Sind Bank has been penalized INR 68.2L for lapses in reporting large exposures and maintaining Basic Savings Bank Deposit Accounts
  
  Broking & Capitals

  • SEBI is cracking down on fund diversion in rights issues to uphold market integrity and investor trust. Some firms misuse raised capital for personal gains instead of business purposes. By imposing penalties and restrictions, SEBI aims to enhance transparency, prevent misconduct, and ensure investor funds are used responsibly.
     
  • SEBI has implemented comprehensive reforms to enhance investor protection while fostering business growth
     
    • Key measures include tightening disclosure norms for Foreign Portfolio Investors (FPIs) to prevent market manipulation, enforcing stricter regulations on Research Analysts and Investment Advisors to ensure transparency, and addressing conflicts of interest within its own governance structure
    • These initiatives seek to balance robust investor safeguards with a conducive environment for market participants, thereby strengthening the integrity and efficiency of India's financial markets

Cards and Payments

• India’s credit card market expanded at a 27.7% CAGR, with spending surging from INR 1.2L Cr in FY13 to INR 15.6L Cr in FY25. However, PSBs struggle with high GNPAs at 12.7%, compared to private banks’ 2.1%, due to wider credit distribution and financial inclusion efforts. While PSBs issued more cards, their per-card spending dropped 16% to INR 39,293, whereas private banks saw a 3.3% increase to INR 55,400. The trend highlights rapid growth alongside rising credit risks, especially for public-sector banks
   
• In Mar’25, India's UPI recorded a significant increase, processing 18.3B transactions, up from 16.1B in Feb’25. This equates to approximately 590M daily transactions. The total transaction value also rose to INR 24.7T from INR 21.9T in the previous month. This growth underscores the expanding adoption of digital payments across the country
   
•  The Indian Renewable Energy Development Agency (IREDA) reported a 27% increase in loan sanctions, reaching INR 47,453Cr for the financial year ending Mar’25, up from INR 37,354 crore the previous year. Loan disbursements also rose by 20% to INR 30,168Cr from INR 25,089Cr in FY23-24
   
  • Additionally, the outstanding loan book expanded by 28%, reaching INR 76,250 Cr as of March'25, compared to INR 59,698 Cr the prior year. IREDA's Managing Director highlighted that these achievements reflect the agency's dedication to financing renewable energy projects and supporting India's clean energy transition through innovative finance solutions

Insurance

• The average age of first-time life insurance buyers in India has dropped to 28 years. However, 81% underestimate their coverage needs, with most having only 3.1 times their annual income insured instead of the recommended 10x. Many also fail to review coverage after major life events, highlighting widespread underinsurance
   
• Delhi will implement the Ayushman Bharat health insurance scheme on Mar’25, becoming the 35th state/UT to do so. The scheme provides INR 5L annual health coverage per family. Previously, Delhi's AAP government had its healthcare plan, but after BJP’s election win, the new administration is fulfilling its promise to adopt AB-PMJAY