# 1 Markets

1.1 Indian equities remained volatile last week, with the Sensex closing at 77,328 and the Nifty at 24,176 on Friday, as DII buying and easing crude prices partly offset persistent FII selling, rupee weakness and geopolitical concerns. Near-term, markets are expected to remain cautiously positive but range-bound, with direction likely to be driven by crude oil trends, geopolitical developments, Q4 earnings momentum and the sustainability of domestic liquidity support.

1.2 US equities ended last week on a strong note, with the S&P 500 closing at a record 7,399, the Nasdaq at an all-time high of 26,244 and the Dow Jones at 49,608, driven by AI-led technology gains, resilient earnings and a stronger-than-expected US jobs report despite intermittent volatility from Middle East tensions and oil price swings.

1.3 Indian bond markets remained relatively stable last week, with the benchmark 10-year G-sec yield hovering around 6.92–6.97% as RBI liquidity support offset concerns around rising crude oil prices and global risk aversion.  US Treasury markets were volatile but broadly range-bound, with the 10-year Treasury yield ending near 4.36–4.39% as strong jobs data and elevated oil prices counterbalanced safe-haven demand amid geopolitical tensions.

# 2 RBI

2.1 RBI last week tightened regulations for money changers and forex dealers, reinforcing banks as the primary entities responsible for compliance, customer protection and anti-money laundering oversight.

• Authorised dealers (non-bank forex entities) must maintain a minimum annual forex turnover of ₹10 crore to continue operations.
• RBI approval will now be mandatory for any change in management, control or ownership involving more than a 50% stake in authorised forex entities.
• RBI has prohibited fresh franchise arrangements in forex business; existing franchisee networks must be phased out within two years.
• A new licence category — AD Category-III — has been introduced for entities offering forex services incidental to their business or innovative forex-linked products/services, with a minimum net worth requirement of ₹2 crore.
• Forex correspondents can continue acting as agents for authorised dealers/banks and may handle purchase/sale of foreign currency notes, coins and travellers’ cheques for travel purposes.

Overall, the revised framework signals RBI’s intent to formalise and tighten supervision of the forex ecosystem by increasing accountability of banks, raising entry standards and curbing lightly regulated franchise-led operations.

2.2 Key take aways from Q4 FY26 Banking Sector Results

• Corporate credit demand revived strongly across major private banks, led by robust growth in wholesale and corporate lending portfolios, particularly in sectors such as electronics, automobiles, renewables, semiconductors, food processing, and acquisition financing.

• As per CareEdge Rising bond yields have sharply eroded the cost advantage of market borrowings, prompting corporates and NBFCs to increasingly shift toward bank funding as spreads between bond yields and lending rates compress significantly.
  • CareEdge Ratings data shows that for AAA-rated NBFCs at the one-year tenor, the differential between bank lending rates and bond yields has narrowed to 156 bps. in March 2026 from 473 basis points in March 2021, (down 67%.)
  • For AA-rated NBFC issuers, the spread has shrunk to 56 bps from 358 basis points over the same period.
  • For A-rated borrowers, the one-year spread turning negative at 151 bps for NBFCs and 111 bps for corporates as of March 2026.

• Net interest margins (NIMs) showed signs of stabilisation as deposit repricing finally began offsetting earlier pressure from declining asset yields following the RBI’s rate cuts.
• Banks strengthened precautionary buffers against emerging geopolitical and macro risks (Axis made Rs. 2000 cr. standard asset provision) including West Asia tensions, elevated energy prices, and weak monsoon risks — even as underlying asset quality and operating trends remained stable.
• Unsecured retail lending began recovering cautiously, led primarily by personal loans, while credit card portfolios remained subdued and banks largely maintained stable unsecured exposure levels.

Q4 FY26 marked a meaningful improvement in the banking sector’s operating environment, with simultaneous easing of pressures across corporate credit demand, deposits, margins, and unsecured lending.

2.3 RBI last week proposed revised norms on holding non-financial assets

• allow banks/FIs to hold specified non-financial assets (SNFAs) only if acquired as part of NPA recovery/resolution.

• Banks cannot sell such assets back to the defaulting borrower or related parties.
• REs must dispose of SNFAs within a maximum period of 7 years.
• Assets must be revalued at least once every 2 years on a distress-sale basis.
• Any decline in value must be immediately recognised in the P&L; valuation gains cannot be booked.
• SNFAs will be carried at the lower distress-sale value or revised netbook value.
• Unsold assets after 7 years (or once carrying value becomes zero) will be treated as assets for the institution’s own use.
• SNFAs must be disclosed separately in balance sheets and excluded from NPA/stressed asset metrics.

 

The draft framework strengthens transparency and prudence in bad-loan recoveries while discouraging misuse or indefinite warehousing of non-financial assets by lenders.

2.4 RBI on Friday issued amendment directions for Commercial Banks, SFBs, and Payments Banks regarding the calculation of Common Equity Tier 1 (CET1) capital.

• RBI has removed the qualifying condition that previously restricted banks from including current-year quarterly profits in their Capital to Risk-Weighted Assets Ratio (CRAR) if their incremental NPA provisions fluctuated by more than 25% in the previous year.

This streamlines capital computation and provides banks with more immediate access to their internal accruals for lending and meeting regulatory capital buffers, rewarding operational profitability.

# 3 SEBI

3.1 SEBI on Friday harmonized the rules for how stock price data can be used for investor awareness and educational purposes.

• SEBI has prescribed a uniform time lag of 30 days for both sharing and using price data for educational content. This replaces the previous complex system (which had a 1-day lag for sharing but a 3-month lag for usage).

This strikes a balance between preventing misuse (where “educational” streams were being used for near-real-time “tips”) and maintaining relevance.

3.2 SEBI last Thursday issued a circular regarding the phase-out or specific discontinuation of certain aspects of the IRRA platform.

• The Investor Risk Reduction Access (IRRA) platform is essentially a “safety net” for retail investors. Think of it as an emergency backup system for the entire stock market, designed to protect if specific stockbroker’s technical systems crash. It was developed by the stock exchanges (NSE, BSE, MCX, NCDEX) and launched in late 2023 following a series of high-profile technical glitches at major brokerages.
• With negligible broker usage amid stronger trading resilience and backup systems, SEBI has proposed discontinuing the IRRA platform, originally launched as an emergency trading access mechanism during broker outages.

 

Stockbrokers will need to upgrade their own internal business continuity and disaster recovery systems to ensure investors can close positions in case of technical glitches, rather than relying on the centralized IRRA.

3.3 SEBI last week introduced a regulatory framework to classify an index as a “significant index” based on the level of mutual fund assets tracking it.

• An index will qualify as a significant index if the daily average cumulative AUM tracking it across mutual fund schemes exceeds ₹20,000 crore for each of the preceding six months.
• Once classified as significant, an index will retain this status unless the tracked AUM falls below the threshold for three consecutive years.
• The framework is aimed at improving transparency, governance and accountability in the administration of widely tracked market indices.
• SEBI has also published an initial list of qualifying indices, including major benchmarks such as the BSE Sensex, Nifty 50 and broader indices like the Nifty 500. The list further includes sectoral, debt and hybrid indices managed by providers such as NSE Indices Ltd, BSE Index Services Pvt Ltd and CRISIL.

The new framework is expected to strengthen investor confidence and benchmark integrity by bringing stricter oversight and governance standards to India’s most widely tracked market indices.

3.4 SEBI has proposed allowing online bond platform providers (OBPPs) to expand operations in GIFT International Financial Services Centre, enabling access to overseas-listed debt securities regulated by International Financial Services Centres Authority.

• Proposal aims to align OBPP rules with stockbrokers, subject to compliance with foreign exchange norms and Liberalised Remittance Scheme investment limits.
• OBPPs may also be allowed to offer Section 54EC tax-saving bonds issued by entities such as Power Finance Corporation, Indian Railway Finance Corporation, and REC Limited.
• Platforms will need to disclose key details of 54EC bonds, including lock-in period, investment limits, tax benefits, and grievance redressal limitations.
• SEBI has proposed easing compliance officer eligibility norms, allowing broader criteria instead of mandating only company secretaries.

The proposed reforms could deepen India’s retail bond market by expanding global debt access, digitising tax-saving bond investments, and easing operational constraints for online bond platforms.

3.5 SEBI has proposed a broad overhaul of buyback regulations to simplify processes, improve transparency and strengthen investor safeguards.

• plans to reintroduce open market buybacks, discontinued from April 2025.
• Companies to electronically notify shareholders within one working day of a buyback announcement to ensure faster dissemination of information.
• proposed capping open market buyback duration at 66 working days while retaining the current 40% minimum utilisation requirement in the first half of the offer period.
• plans to remove the separate trading window requirement and discontinue disclosure of the company’s identity as purchaser on trading screens
• Promoter holdings may be frozen at the ISIN level during buybacks to curb trading by promoters and related entities during the offer period.
• Companies would be explicitly barred from launching buybacks that could breach minimum public shareholding (MPS) norms.

The proposed reforms signal SEBI’s attempt to revive open market buybacks with tighter governance, faster execution and lower compliance friction, balancing ease of doing business with stronger investor protection.

# 4 Technology

India’s Cell Broadcast Emergency Alert System: A Welcome and Overdue Step

The nationwide test last week of India’s indigenous Cell Broadcast alert system, developed by C-DOT, is a significant and overdue upgrade to the country’s public safety infrastructure. Reaching 12–14 crore phones within 10 seconds — without internet, overriding silent settings, and supporting multiple languages — it resolves the core failure of SMS-based alerts, which slow to a crawl precisely when networks are most congested.

Why It Matters

India is one of the world’s most disaster-prone nations. In calamities — cyclones, floods, earthquakes — the margin between warning and fatality is measured in minutes. For NDMA and IMD, early warning is only valuable if it is actually received. A system that cuts through DND settings and delivers an audible alert with a voice message ensures warnings are not merely sent but heard. The multilingual capability is equally critical: alerts in only English or Hindi leave out a substantial share of the population, a gap this system directly closes.

Ground Impact and Future Potential

Beyond disaster response, the system has value in conflict or national security scenarios, mirroring alert systems in Israel and Ukraine. The planned two-way capability — allowing citizens to signal distress or access help via an IVR link — would transform it from a broadcast tool into an active response channel. Building this indigenously rather than sourcing from global vendors also reflects sound strategic thinking: critical safety infrastructure should not rest on foreign supply chains.

With expansion beyond state capitals, universal handset coverage, and the integration of two-way communication, this system has the potential to meaningfully reduce the human cost of disasters in one of the world’s most populous and climate-vulnerable nations.

 

# 5 Economy

5.1 The Union Cabinet has approved Emergency Credit Line Guarantee Scheme [ECLGS 5.0] with ₹18,100 crore of guarantees to facilitate up to ₹2.55 lakh crore of additional credit support for MSMEs, corporates and airlines impacted by the West Asia conflict, rising ATF prices, supply-chain disruptions and liquidity stress.

• The scheme provides 100% guarantee cover for MSMEs and 90% for non-MSMEs and airlines through NCGTC, with ₹5,000 crore specifically earmarked for airlines. Loans can be extended to 7 years, including a 2-year moratorium, easing short-term refinancing and cash-flow pressures.
• ECLGS 5.0 is positive for the banking sector as sovereign guarantees reduce incremental credit risk, provisioning burden and capital consumption, while simultaneously supporting loan growth and limiting asset-quality deterioration during a period of elevated geopolitical uncertainty.
• PSU banks such as State Bank of India, Bank of Baroda and Punjab National Bank are likely to benefit the most given their larger MSME, working-capital and aviation-linked exposure, while among private banks ICICI Bank and Axis Bank appear relatively better placed due to stronger corporate lending franchises.

Overall, the scheme acts as a near-term policy cushion for lenders by supporting liquidity, containing stress formation and improving confidence in vulnerable sectors exposed to oil prices, trade disruptions and weaker cash flows.

5.2 As per HSBC PMI data released last week

• India’s manufacturing activity improved modestly in April, with HSBC Manufacturing PMI rising to 54.7 from 53.9 in March, though growth remained the second slowest in nearly four years.

• Services sector remained stronger than manufacturing, with Services PMI rising to a five-month high of 58.8, lifting Composite PMI to 58.2.

• Gains were driven by better new orders, production and exports, supported by resilient domestic demand, advertising, e-commerce and logistics activity.
• Export orders hit a seven-month high, led by demand from markets including China, UAE, Saudi Arabia, UK, Japan and Australia.
• Business confidence remained positive but softened sequentially due to geopolitical uncertainty, inflation risks and cautious client spending.

Overall, domestic demand resilience continues to support economic momentum, but sustained oil price pressures and imported inflation remain key risks to growth and margins.

5.3 S&P Global last week cut India’s FY27 GDP growth forecast to 6.6% from the earlier 7.1%, citing the adverse impact of the ongoing West Asia conflict.

• The report expects elevated crude oil prices of around $90–95 per barrel to pressure India’s macroeconomic stability through higher import costs and inflation.
• Retail inflation is projected to rise to an average of 5.1% in FY27, driven largely by energy and food price pressures.
• The report highlights external risks from energy supply disruptions, rising oil and gas prices, and volatile global financial conditions.
• The report also recommends developing a comprehensive energy storage policy and stronger strategic reserves to improve resilience against future global supply shocks.

India’s medium-term growth outlook remains resilient, but strengthening energy and food security frameworks will be critical to mitigating external shocks and sustaining the Viksit Bharat growth trajectory.

5.4 Moody’s Ratings said large emerging economies, including India, have remained resilient through multiple global shocks since 2020 without losing market access.

• Moody’s highlighted India as one of the most resilient emerging markets across key indicators such as bond yields, currency stability and sovereign risk perception, while Türkiye was among the most volatile due to policy and credibility concerns.
• India and Thailand were identified as better prepared for future shocks because of predictable monetary policy, anchored inflation expectations and flexible exchange rates.
• India, Malaysia, Indonesia, Mexico and Thailand demonstrated sustained market resilience, with limited credit spread widening, contained currency depreciation and orderly bond market adjustments.
• For India, Moody’s cautioned that elevated public debt levels remain a constraint on policy flexibility during periods of stress, though longer debt maturities help reduce refinancing risks.
• The assessment covered four major global stress episodes: the COVID-19 pandemic, the 2022 global inflation and US Fed tightening cycle, the 2023 US regional banking turmoil, and renewed tariff tensions in 2025.

Moody’s assessment underscores India’s growing standing as a resilient and policy-stable emerging economy, though high public debt remains a medium-term structural challenge.