Regulatory Digest: The Financial Services Bulletin

The Financial Services Bulletin

This is the December edition of Nishith Desai Associates’ monthly financial services newsletter in collaboration with U.S.-India Business Council.

INTRODUCTION

The last month continued to solidify India’s position as the world’s fastest-growing major economy, driven by accelerated domestic expansion and macroeconomic stability. Real GDP growth surged to 8.2% in the second quarter of financial year (“FY”) 2025-26, contributing to an 8% growth rate for the first half of the fiscal year. This robust performance, alongside key policy measures like the proposed Goods and Services Tax 2.0 two-slab structure and an upward-revised FY 2025-26 GDP forecast of 6.8% by the Reserve Bank of India (“RBI”), signals sustained momentum and positive international confidence in India’s growth trajectory¹.

Nishith Desai Associates (“NDA”), in collaboration with the US-India Business Council (“USIBC”), is pleased to launch the December 2025 edition of our monthly financial services roundup entitled “The Financial Services Bulletin”. Through this publication, we aim to cull out key developments in the financial services industry that, in our view, “summarize the month”. Our roundup has been meticulously curated into two parts: Part I provides updates from the broader business world, ensuring that key developments relevant to our stakeholders are concisely discussed, while Part II covers key legal and regulatory developments in the financial services industry.

PART I – BUSINESS AND NEWS UPDATES

TRADES, TRENDS, AND LITIGATION

1. TATA Consultancy Services (“TCS”) partners with TPG Inc. to scale its AI-ready HyperVault data center platform².

TCS has announced a strategic partnership with a Texas-based global alternative asset manager TPG Inc. to support the growth of its AI-focused data center business, HyperVault. The partnership will fund HyperVault’s GW-scale AI-ready infrastructure expansion and aligns with TCS’ vision to build data centers exceeding 1 GW capacity in the coming years. TCS and TPG Inc. will jointly invest up to INR 18,000 crore (approx. USD 2.2 billion), of which TPG Inc. will contribute up to INR 8,820 crore for an eventual stake between 27.5% and 49% in HyperVault. The investment is routed through TPG Rise Climate, its Global South Initiative, and its Asia Real Estate platform.

According to TCS, the partnership strengthens its ability to deliver world-class AI infrastructure, reduces capital outlay, and enhances long-term value creation for shareholders.

2. RBI imposes INR 91 Lakh penalty on Housing Development Finance Corporation (“HDFC”) Bank for compliance deficiencies

On 18 November 2025, the RBI imposed a monetary penalty of INR 91 lakh on HDFC Bank for violations of Section 19(1)(a) read with Section 6(1) of the Banking Regulation Act, 1949, and for non-compliance with RBI directions on interest rate benchmarks, outsourcing norms, and Know Your Customer (“KYC”) obligations. The action follows RBI’s Statutory Inspection for Supervisory Evaluation, which reviewed the bank’s financial position as of 31 March 2024, and identified multiple supervisory concerns.

The RBI found three key violations during this inspection, namely: (i) use of multiple benchmarks within the same loan category; (ii) a wholly owned subsidiary undertaking activities not permitted for banking companies under Section 6 of the Banking Regulation Act; and (iii) outsourcing of the function of determining KYC compliance for certain customers.

3. Apple Inc. (“Apple”) challenges India’s new competition law over potential USD 38 billion penalty³.

Apple has approached the Delhi High Court challenging recent amendments to the Competition Act, 2002 that permit the Competition Commission of India (“CCI”) to impose fines of up to 10% of the average “global” turnover of the preceding three financial years on enterprises found guilty of abuse of dominance or anti-competitive conduct. In its petition, Apple appears to have argued that this framework, introduced through the CCI (Determination of Monetary Penalty) Guidelines, 2024⁴, could expose it to fines of nearly USD 38 billion, and is “arbitrary, unconstitutional, and disproportionate”, as it is based on Apple’s global turnover and not local revenues.

This is one of the first cases challenging the revamped Indian antitrust laws, which have come into force since September 2024.

4. Government signals fresh push for Big-Bank Consolidation and Higher FDI in PSU Banks⁵

Union Finance Minister Nirmala Sitharaman, in an inaugural address at a conclave in Mumbai, signalled a renewed push towards creating larger, globally competitive public-sector banks. In her remarks, she stated that India “needs a lot of big and world-class banks” and confirmed that “work has already commenced,” with discussions underway between the Ministry of Finance, the RBI, and state-run lenders on potential consolidation pathways, including mergers. Parallel to the consolidation agenda, the government is also evaluating a major shift in its FDI framework for public-sector banks. Public sources reveal that the Centre is considering raising the cap on FDI in Public Sector Undertaking (PSU) banks to 49%, up from the current limit of approximately 20%, while retaining minimum 51% government ownership.⁶

These two policy directions point to the government’s broader objective of strengthening capital buffers and enhancing the global competitiveness of India’s banking system. The discussions follow recent foreign investor interest in Indian banks, including Emirates NBD’s stake in RBL Bank and Sumitomo Mitsui Banking Corporation’s investment in Yes Bank (as reflected in our previous newsletter here).

PART II – LEGAL AND REGULATORY UPDATES

FINANCIAL SERVICES

Vaibhav Parikh (New York)

Viral Mehta (Mumbai-BKC)

Nishchal Joshipura (Mumbai-BKC)

1. RBI issues revised guidelines on setting up Wholly Owned Subsidiaries (“WOS”) by Foreign Banks⁷.

The RBI has issued the Reserve Bank of India (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025, replacing the earlier WOS framework and establishing a comprehensive, modernised regime governing entry of foreign banks into India, conversion of existing branches into WOS, prudential standards, governance, group-entity interaction, and branch expansion. The guidelines are mandatorily applicable to foreign banks which commenced banking business in India from August 2010 onwards, while foreign banks that commenced banking business in India prior to August 2010 have the option to continue operating through the branch mode or to convert such branches into a WOS. The guidelines outline conditions for mandatory WOS presence, eligibility criteria for new applicants, national treatment parameters, capital norms, and post-licensing obligations.

Few of the key provisions of the guidelines are as follows:

• Eligibility criteria for establishing a WOS: Foreign banks seeking to establish a WOS in India must satisfy minimum conditions relating to financial soundness, prudential home-country regulations, international presence, home-country supervisory cooperation, and parent-bank rating by globally recognised agencies such as Moody’s, S&P or Fitch. Adequate risk-management and internal-control systems are required.
• Mandatory WOS structure in specific circumstances: A foreign bank must operate only through a WOS where: (i) its home jurisdiction denies adequate disclosure norms; (ii) consolidated supervision is inadequate; (iii) it is incorporated in a jurisdiction with a higher systemic-risk profile; (iv) RBI classifies the bank as systemically important in India; or (v) any other situation where RBI determines WOS presence necessary. Foreign banks entering India after August 2010 may also be required to convert branches into a WOS if so mandated by RBI.
• National treatment and prudential parity: WOSs of foreign banks will be treated as “foreign banks” under FEMA (Non-Debt Instruments) Rules⁸ and will receive near-equivalent treatment as domestic banks, except where differentiated treatment is necessary due to systemic-risk considerations. Domestic financial stability concerns may require calibrated exceptions for WOSs.

In addition, the guidelines also prescribe minimum capital and Basel III buffers, detailed corporate governance norms, statutory and prudential compliance requirements, branch authorisation rules, priority-sector lending obligations, conditions for use of parent-bank support, norms for investment in subsidiaries / associates, dilution and M&A flexibility, customer-grievance standards, and a step-wise procedure for conversion of existing branches into a WOS. The guidelines modernise and tighten the WOS framework, creating a clearer and more risk-aligned regime for foreign banks operating in India.

2. RBI issues Consolidated Master Directions, repealing 9,445 circulars and reorganising the regulatory framework⁹.

On November 28, 2025, the RBI released a comprehensive set of Consolidated Master Directions (“MDs”), marking a major overhaul of its regulatory communication framework. This move follows the RBI’s earlier press release announcing the overhaul, which was covered in a previous edition of this newsletter. Over the years, RBI had issued thousands of circulars and guidelines across various statutes, resulting in overlaps, outdated instructions, and increasing compliance complexity for regulated entities. To address this, the RBI’s Department of Regulation has reorganised more than 9,000 existing instructions into a unified and user-friendly structure, consolidating approximately 3,500 directions into 238 function-wise MDs spanning 11 categories of regulated entities, including banks, Non-Banking Financial Companies (NBFCs), Asset Reconstruction Companies (ARCs), and Credit Information Companies. Drafts of these MDs were published for public consultation in October 2025, and over 770 stakeholder comments were reviewed before finalisation.

As part of this exercise, the RBI has also identified 9,445 circulars as obsolete, withdrawing them to reduce repetition and enhance regulatory clarity. The new MDs will now serve as the sole, centralised repository of regulations issued by the Department of Regulation, improving ease of reference and reducing compliance burden. This reorganisation is intended as a structural, “as-is” consolidation rather than a policy revision, although the streamlined framework is expected to significantly improve transparency, navigability, and ease of doing business across India’s financial system.

3. RBI amends Export of Goods and Services Regulations, extending timelines for realisation and repatriation¹⁰.

RBI has notified the Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025, introducing important extensions to timelines applicable to export proceeds realisation and the write-off of unrealised receivables. These amendments come into force upon publication in the Official Gazette and modify the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015¹¹ (“FEMA (Export of G&S) Regulations”).

Few of the key provisions of the master directions are as follows:

• Extended timeline for realisation of export proceeds: Regulation 9 of the FEMA (Export of G&S) Regulations has been amended to extend the period, for realising and repatriating the full value of goods or services exported, from nine months to fifteen months. This extension applies to both the general realisation period under Regulation 9(1) and the specific cases under Regulation 9(2)(a).
• Longer period for write-off of unrealised export receivables: Regulation 15 of the FEMA (Export of G&S) Regulations has been amended to increase the permissible period for write-off of unrealised export bills from one year to three years. This revised timeline applies across sub-regulation (1)(i), its proviso, and sub-regulation (2), thereby significantly expanding the window available to exporters and Authorised Dealer banks to regularise overdue export receivables.

These amendments provide exporters with enhanced operational flexibility in managing receivables during periods of extended payment cycles and global trade uncertainty. The extended realisation and write-off windows are expected to ease compliance pressures, reduce classification issues, and offer additional time for settlement of legitimate export transactions.

4. Reserve Bank of India (“RBI”) issues Trade Relief Measures Directions, 2025, to support exporters facing global trade disruptions¹².

RBI has issued the Reserve Bank of India (Trade Relief Measures) Directions, 2025, introducing a structured relief framework to mitigate debt-servicing difficulties arising from global trade disruptions and ensure continuity of viable export businesses. The directions come into immediate effect and apply to the following entities (“REs”): commercial banks, cooperative banks, non-banking financial companies (including housing finance companies), All-India Financial Institutions, and Credit Information Companies (“CICs”) (for credit-reporting provisions).

Few of the key provisions of the directions are as follows:

• Eligibility Criteria: Relief may be extended only to borrowers engaged in export sectors listed in the Annex (including chemicals, textiles, plastics, machinery, footwear, pearls and precious stones, among others), who held an outstanding export credit facility as of August 31, 2025, and whose accounts were classified as “Standard” on that date. REs must publish objective criteria for evaluating such relief.
• Moratorium and Deferment: REs may grant a moratorium on instalments of all term loans falling due between September 1, 2025, and December 31, 2025. For working-capital facilities (cash credit / overdraft), interest recovery during this period may be deferred. Interest shall accrue on a simple interest basis, and accumulated interest may be converted into a funded interest term loan repayable no later than by September 30, 2026. REs may also temporarily recalculate drawing power by reducing margins or reassessing working capital limits.
• Extended Tenor for Export Credit: Export-financing REs may permit an enhanced credit period of up to 450 days for pre-shipment and post-shipment export credit disbursed till March 31, 2026. For packing credit already availed before August 31, 2025, where goods could not be dispatched, liquidation may be permitted from any legitimate alternative source, including domestic sale proceeds.
• Asset Classification Relief: The moratorium/deferment period must be excluded for counting days past-due under the extant income recognition and provisioning norms. These reliefs (as well as any recalculation of drawing power) will not be treated as restructuring and therefore will not result in an asset classification downgrade solely on account of extension granted under the directions. After the moratorium expires, the usual classification norms apply. CICs must ensure that relief measures do not adversely affect borrower credit histories.
• Provisioning Requirements: For eligible borrowers whose accounts were standard but in default as of August 31, 2025, REs must create a general provision of at least 5% of the total outstanding by December 31, 2025. These provisions may later be adjusted against specific provisioning for future slippages, and any residual balance by March 31, 2026, may be written back or adjusted by June 30, 2026. These amounts must be shown separately in the balance sheet until adjusted.
• Disclosure Requirements: REs must maintain a management information system capturing borrower-wise and facility-wise relief granted and must submit fortnightly reports (as of the 15th and end of each month) on the RBI DAKSH platform.

This relief framework provides targeted support to exporters affected by global headwinds while preserving regulatory discipline. By offering time-bound moratoriums, extended export-credit periods, and classification forbearance, the Directions aim to stabilise trade-exposed sectors and safeguard viable businesses during external upheavals.

PUBLIC MARKETS

Kishore Joshi (Mumbai)

Viral Mehta (Mumbai-BKC)

Nishchal Joshipura (Mumbai-BKC)

1. SEBI issues consultation paper proposing amendments to Issue of Capital and Disclosure Requirements Regulations, 2018 (“ICDR”) to enhance ease of doing business and increase participation of retail investors in Initial Public Offer (“IPO”) processes¹³.

SEBI has released a consultation paper on proposed amendments to the ICDR, aimed at reducing operational challenges for issuers during IPOs, rationalising disclosure requirements, and improving access for retail investors. The proposals address two key areas: (i) lock-in of pre-issue share capital where shares are pledged prior to an IPO; and (ii) replacement of the abridged prospectus with a simplified Offer Document Summary.

Few of the key proposals are as follows:

• Enabling lock-in for pledged shares of non-promoters: Currently, depositories cannot create lock-in on pledged shares, creating compliance obstacles for issuers where pre-IPO shareholders have pledged their holdings. SEBI proposes allowing depositories, on issuer instructions, to mark such securities as non-transferable for the entire lock-in period, supported by amendments to the company’s Articles of Association and lender notifications. This framework mirrors the existing treatment of pledged promoter shares and is intended to reduce delays in the IPO process.
• Mandatory inclusion of lock-in treatment in Articles of Association: Issuers undertaking IPOs must amend their AoA to clarify that (i) pledged shares will be deemed locked-in; (ii) on pledge invocation, lock-in continues in the pledgee’s account; and (iii) on release, the shares continue to remain locked-in in the pledger’s account. Depositories would automatically apply lock-in for the balance period after any invocation or release.
• Introduction of a standardized Offer Document Summary: SEBI proposes replacing the abridged prospectus with a concise, focused Offer Document Summary to be submitted with the Draft Red Herring Prospectus (DRHP), Updated Draft Red Herring Prospectus-I (UDRHP-I), Red Herring Prospectus (RHP), and prospectus, and hosted on the websites of the issuer, SEBI, stock exchanges, and lead managers. The Summary would include enhanced disclosures on business, industry overview, promoters, financial highlights, KPIs, outstanding litigation, risk factors, and board / KMP details, with rationalised word limits and standardised formats to aid retail investor comprehension.
• Dispensing with abridged prospectus requirements: With the Offer Document Summary serving as a simplified, easily accessible version of the prospectus, SEBI proposes deleting the abridged prospectus provisions under the ICDR. Application forms would instead include QR codes and links to the RHP, Offer Document Summary, and price band advertisement.
• Revisions across the ICDR framework and related circulars: Consequential changes include amendments to multiple ICDR provisions relating to IPOs, pre-filed IPOs, Further Public Offers (FPOs), Small and Medium Enterprises IPOs, and modifications to SEBI circulars referring to abridged prospectus requirements.

These proposals aim to streamline the IPO process, reduce documentation burdens, improve operational clarity around lock-in compliance, and significantly enhance the accessibility of issuer disclosures for retail investors by introducing a standalone, simplified summary document.

2. Securities and Exchange Board of India (“SEBI”) amends Listing Obligations and Disclosure Requirements, 2015 (“LODR”), revising the Related Party Transaction (“RPT”) framework and annual report requirements¹⁴.

SEBI has notified the SEBI (LODR) (Fifth Amendment) Regulations, 2025, introducing significant changes to the RPT regime and annual report compliance obligations for listed entities. The amendments, notified on November 19, 2025, modify the materiality thresholds for RPTs, expand specific exemptions, clarify shareholder approval requirements, and align annual report norms with the governing statutes under which entities are constituted.

Few of the key provisions of the amendment regulations are as follows:

• Expanded exemption for retail purchases: The existing exemption for retail purchases by directors and Key Managerial Personnel (“KMPs”) has been broadened to include their relatives, provided that such purchases are undertaken on terms uniformly applicable to all employees, directors, KMPs and their relatives.
• Scale-based materiality thresholds for RPTs: A turnover-linked sliding scale has been introduced, with the maximum upper limit capped at INR 5,000 crore (revised from the earlier absolute cap of INR 1,000 crore). Schedule XII of the LODR now prescribes the following thresholds, with illustrations:
  

  Consolidated Turnover of listed entity	Threshold (as a % of consolidated turnover)	Maximum upper limit
  Up to INR 20,000 crores	10%	INR 2,000 crores
  More than INR 20,000 crores to up to INR 40,000 crores	INR 2,000 crores + 5% above INR 20,000 crores	INR 3,000 crores
  More than INR 40,000 crores	INR 3,000 crores + 2.5% above INR 40,000 crores	INR 5,000 crores

• De minimis exemptions and revised significant RPT norms for subsidiaries: RPTs of subsidiaries that exceed the lower of (i) 10% of the subsidiary’s standalone turnover or (ii) the listed holding company’s materiality thresholds will require the listed entity’s audit committee approval. Transactions aggregating up to INR 1 crore remain exempt. For subsidiaries less than one year old, thresholds are based on the lower of (i) 10% of paid-up share capital plus securities premium or (ii) the holding company’s materiality thresholds.
• Clarification on omnibus shareholder approvals: Approvals obtained in an Annual General Meeting (“AGM”) (held within the timelines under Section 96 of the Companies Act, 2013) are valid from AGM to AGM. Approvals obtained in any other general meeting or via postal ballot remain valid for one year.
• Revised annual report requirements (Regulations 53 & 58): Listed entities must ensure that their annual reports comply not only with LODR but also with the governing statute applicable to the entity. Revised annual reports must be filed with stock exchanges within 48 hours of the AGM. Holders of non-convertible securities must be provided with a web link / QR code for accessing the annual report.

The revised framework brings greater proportionality and clarity to the RPT approval regime while strengthening disclosure standards and harmonising annual report compliance across entity types. These amendments are also expected to enhance governance oversight by enabling more calibrated and risk-aligned monitoring of related-party dealings across large and complex corporate groups.

3. SEBI Introduces Informal Guidance Scheme, 2025, Replacing Two-Decade-Old Mechanism¹⁵

The SEBI has announced a significant overhaul of its long-standing Informal Guidance Scheme. Effective December 1, 2025, the new Informal Guidance Scheme, 2025 replaces the two-decade-old 2003 framework, introducing key changes aimed at enhancing efficiency, expanding accessibility, and formalizing the guidance process for capital market participants. The scheme significantly expands the universe of eligible applicants, now formally including Market Infrastructure Institutions (MIIs), listed companies, prospective issuers, acquirers, and managers of Pooled Investment Vehicles. Furthermore, the framework formalizes two distinct guidance outcomes: No-Action Letters (indicating no enforcement action for a specified transaction) and Interpretive Letters (providing SEBI’s official interpretation of a specific securities law provision).

To streamline the process, all applications must now be submitted electronically in the prescribed format and must be accompanied by a non-refundable fee of INR 50,000. Critically, the scheme introduces a mandated timeline, requiring SEBI to issue its guidance within 60 days of receiving a complete application (excluding the time taken for any clarifications requested from the applicant). Applicants also gain the ability to formally seek confidential treatment for their application for up to 90 days, with commercially sensitive details redacted before the final guidance is published.

INSURANCE

Nishchal Joshipura (Mumbai-BKC)

Parul Jain (Delhi)

1. Insurance Regulatory and Development Authority of India (“IRDAI”) conducts high-level review with insurers for stronger policyholder-centric grievance handling¹⁶

On November 26, 2025, the IRDAI convened a high-level meeting with the Chief Compliance Officers (“CCOs”) and Grievance Redressal Officers (“GROs”) of all insurers to undertake a comprehensive review of industry-wide compliance practices, grievance-handling mechanisms, and emerging trends in policyholder complaints.

Mr. Ajay Seth, the Chairman of IRDAI, emphasized the critical connection between the Constitution’s foundational values of justice, equality, and liberty and the insurance principle that trust is the cornerstone of the industry, highlighting that compliance and grievance redressal functions are paramount to protecting policyholders. He further stressed the necessity for a deep cultural shift within organizations, asserting that grievance redressal must not be treated as the end of a process, but rather as a crucial early warning system. Expressing concern over the rising volume of complaints, the IRDAI urged all insurers to significantly improve both the quality and timeliness of their resolutions. Insurers were specifically advised to establish clear and standardised Standard Operating Procedures (“SOPs”) for accurately differentiating between service requests and formal complaints, adopt a proactive, policyholder-centric approach in their operations, and reinforce internal processes to ensure strict adherence to all prescribed timelines.

MISCELLANEOUS

1. Ministry of Electronics and Information Technology (“MeitY”) issues Draft Digital Personal Data Protection Rules, 2025¹⁷, operationalising key provisions of the Digital Personal Data Protection Act, 2023 (“DPDPA”).

MeitY has released the Draft Digital Personal Data Protection Rules, 2025 (“Draft Rules”), providing the first detailed compliance framework under the DPDPA, India’s standalone data privacy legislation enacted in August 2023. The Draft Rules outline obligations for data fiduciaries, consent management, security safeguards, breach notification, children’s data, and cross-border transfers (a detailed analysis of the Draft Rules can be found here).

Public comments are invited until February 18, 2025. Once finalised, these Rules will pave the way for enforcement of the DPDPA.

Few of the key provisions of the Draft Rules are as follows:

• Consent and Notice Requirements: Data fiduciaries must obtain free, specific, informed and unambiguous consent from data principals for processing personal data. Notices must be provided in English and other official Indian languages, specifying categories of personal data collected, purposes of processing, rights of the data principal, and details of grievance redressal.
• Consent Manager Framework: The Draft Rules operationalise the newly introduced “consent manager” mechanism, which refers to registered persons that operate as points of contact  to enable a data principal to give, manage, review and withdraw their consent through an accessible, transparent and interoperable platform. Entities meeting prescribed criteria may apply for registration as consent managers with the Data Protection Board of India.
• Security Safeguards for Personal Data: Data fiduciaries may adopt their own security standards but must ensure minimum measures, such as secure storage, access controls, maintenance of logs, periodic monitoring, incident detection mechanisms, tracking of authorised / unauthorised access, and documented security practices.
• Processing of Personal Data of Children and Persons with Disabilities: Processing such data requires verifiable consent from a parent or legal guardian. The manner of obtaining verifiable consent is left to the discretion of the data fiduciary, allowing flexibility in adoption of appropriate authentication mechanisms.
• Cross-Border Personal Data Transfers: Cross-border transfers are permitted by default, except where (i) the Indian government notifies a jurisdiction as a restricted territory, or (ii) the government restricts transfer of specific categories of personal data. Additional compliance requirements may be prescribed for transfers to designated jurisdictions.
• Data Breach Notification Requirements: Upon becoming aware of a personal data breach, data fiduciaries must immediately notify affected data principals and the Data Protection Board. A detailed breach report must then be submitted to the Board within 72 hours of becoming aware (or within an extended timeline approved by the Board).

The Draft Rules mark a significant step toward operationalising India’s new data protection regime. By laying down clear obligations around consent, security, data breaches, and cross-border transfers, the framework aims to strengthen user trust and establish a structured compliance environment for businesses processing digital personal data in India.

2. Government notifies India’s unified Labour Code regime, consolidating 29 laws into a modern employment framework

The Government of India has formally brought into effect the long-awaited four Labour Codes: The Wage Code (2019)¹⁸, Industrial Relations Code (2020)¹⁹, Occupational Safety, Health and Working Conditions Code (2020)²⁰, and Social Security Code (2020)²¹, through notifications dated November 21, 2025²². This marks a major structural overhaul of India’s labour law architecture, replacing 29 central legislations with a streamlined, uniform regulatory framework aimed at improving ease of doing business while strengthening worker protections. A detailed analysis of the notified codes can be found here.

Few of the key reforms under the Labour Codes are as follows:

• Simplified registration & compliance: A unified electronic registration system replaces multiple licences and returns, for all establishments that employ 10 or more workers. Additionally. Separately, the thresholds for factories and contract labour have been increased (50 for the applicability of contract labour legislations and 20 / 40 for factories, depending on whether power is used) under the Occupational Safety, Health and Working Conditions Code, significantly reducing compliance for smaller establishments.
• Expanded workforce flexibility: The Industrial Relations Code raises key regulatory thresholds to 300 workers for obtaining prior approval for lay-offs, retrenchment, closure, and for the applicability of Standing Orders, thereby standardising requirements across states. Fixed-term employment is formalised with full parity of benefits, while a new 14-day notice period for strikes / lockouts applies across all industries. Separately, the expanded definition of “worker” now covers supervisory employees whose wages do not exceed INR 18,000 per month, thereby bringing such employees within the scope of applicable labour laws, from which they were earlier excluded.
• New wage definition & minimum wage floor: The Wage Code introduces a uniform wage definition applicable across all labour statutes and establishes a statutory “National Floor Wage” below which states cannot prescribe minimum wages. Equal remuneration protections now expressly include transgender persons, which expands inclusivity.
• Broader social security coverage: The Social Security Code extends social protection to gig workers, platform workers, and the unorganised sector. Key changes include pro-rata gratuity eligibility for fixed-term employees, nationwide ESI applicability, portability of benefits through universal registration, and aggregator contributions of 1–2% of turnover for gig-worker welfare. This is a major relief for a larger proportion of delivery partners and other workers that were otherwise not regulated.
• Digital and facilitative enforcement: Across the codes, the traditional inspector system is replaced by “Inspector-cum-Facilitators”, with web-based inspections, electronic record-keeping, decriminalisation of minor offences, and compounding mechanisms to encourage voluntary compliance.

While all provisions of the Industrial Relations Code and Occupational Safety, Health and Working Conditions Code are now in force, only select provisions of the Wage Code and Social Security Code have been notified. The Ministry of Labour and Employment has stated that revised draft rules will be released shortly for a 45-day public consultation, following which the remaining provisions of the codes will be operationalised.

CONCLUSION

The developments across November and December 2025 underscore a decisive phase of regulatory consolidation and institutional recalibration across India’s financial services landscape. From the RBI’s sweeping reorganisation of its regulatory framework and recalibrated foreign bank regime, to SEBI’s targeted capital-markets reforms and the government’s long-awaited labour law overhaul, the period reflects a clear policy intent to combine structural clarity with growth facilitation. At the same time, evolving enforcement priorities and governance expectations signal a more outcomes-oriented supervisory approach.

Authors

Smita Singh, Parina Muchhala and Nishchal Joshipura

You can direct your queries or comments to the relevant member.

¹“8.2% GDP: India’s Growth Story Strengthens,” Press Information Bureau, Government of India, Press Release ID 2195990, posted on 28 November 2025, available at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2195990&reg=3&lang=1

²“TCS secures US $1 billion investment from TPG to accelerate AI-data center business HyperVault,” press release by Tata Consultancy Services (TCS), available at: https://www.tcs.com/who-we-are/newsroom/press-release/tcs-secures-1bn-investment-from-tpg-accelerate-ai-data-center-business-hypervault

³“Apple Inc. & Anr. v. Union of India & Anr.,” W.P.(C) 17934/2025, Petition filed before the Delhi High Court, available at: https://delhihighcourt.nic.in/app/showlogo/1764332055_eda9717de2f5d179_683_179342025.pdf/2025

⁴“Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024,” Notification No. B-14011/1/2024-ATD-II, dated March 6, 2024, Competition Commission of India, available at: https://www.cci.gov.in/images/whatsnew/en/the-competition-commission-of-india-determination-of-monetary-penalty-guidelines-20241709736785.pdf

⁵“India needs big, world-class banks, says FM Sitharaman; discussions on with RBI and banks to expand scale,” The Hindu, published on 6 November 2025, available at: https://www.thehindu.com/business/Industry/india-needs-big-world-class-banks-nirmala-sitharaman/article70248014.ece

⁶“India plans to hike foreign investment cap in state-run banks to 49%,” Reuters, published on 27 October 2025, available at: https://www.reuters.com/sustainability/boards-policy-regulation/india-plans-hike-foreign-investment-cap-state-run-banks-49-source-says-2025-10-27/

⁷“Reserve Bank of India (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025,” Notification No. RBI/DOR/2025-26/144, dated November 28, 2025, Reserve Bank of India, available at: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/144MD.pdf

⁸“Foreign Exchange Management (Non-Debt Instruments) Rules, 2019,” S.O. 3732(E), dated October 17, 2019, Ministry of Finance (Department of Economic Affairs), Government of India, available at: https://enforcementdirectorate.gov.in/sites/default/files/Act%26rules/Foreign%20Exchange%20Management%20%28Non-Debt%20Instrument%29%20Rules%2C%202019%20-%20without%20amendment_2.pdf

⁹“Reserve Bank of India issues Consolidated Master Directions,” Press Release No. 2025-2026/1588 dated November 28, 2025, Reserve Bank of India, available at: https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61705

¹⁰“Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025,” Notification No. FEMA 23(R)/(7)/2025-RB dated November 13, 2025, Reserve Bank of India, available at: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12921&Mode=0

¹¹“Foreign Exchange Management (Export of Goods and Services) Regulations, 2015,” Notification No. FEMA 23(R)/2015-RB, dated January 12, 2016, Reserve Bank of India, available at: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10256&Mode=0

¹²“Reserve Bank of India (Trade Relief Measures) Directions, 2025,” Notification No. DOR.STR.REC.60/21.04.048/2025-26 dated November 14, 2025, Reserve Bank of India, available at: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12921&Mode=0

¹³“Consultation Paper on amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue,” Securities and Exchange Board of India, issued on November 13, 2025, available at: https://www.sebi.gov.in/reports-and-statistics/reports/nov-2025/consultation-paper-on-amendments-to-sebi-issue-of-capital-and-disclosure-requirements-regulations-2018-with-the-objective-of-enhancing-ease-of-doing-business-and-increasing-the-participation-of-re-_97742.html

¹⁴“Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2025,” Securities and Exchange Board of India, notified on November 19, 2025, available at: https://www.sebi.gov.in/legal/regulations/nov-2025/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-fifth-amendment-regulations-2025_97840.html

¹⁵“Securities and Exchange Board of (India Informal Guidance) Scheme, 2025,” November 18, 2025, Securities and Exchange Bank of India, available at: https://www.sebi.gov.in/legal/guidelines/nov-2025/securities-and-exchange-board-of-india-informal-guidance-scheme-2025_98006.html

¹⁶“Press Release on High-Level Meeting with CCOs and GROs,” Insurance Regulatory and Development Authority of India, issued on 26 November 2025, available at: https://irdai.gov.in/web/guest/document-detail?documentId=8137584

¹⁷“Draft Digital Personal Data Protection Rules, 2025,” Ministry of Electronics and Information Technology, issued on 14 November 2025, available at: https://www.meity.gov.in/static/uploads/2025/11/53450e6e5dc0bfa85ebd78686cadad39.pdf

¹⁸“The Code on Wages, 2019,” Ministry of Labour and Employment, Act No. 29 of 2019, enacted on 8 August 2019, available at: https://labour.gov.in/sites/default/files/the_code_on_wages_2019_no._29_of_2019.pdf

¹⁹“The Industrial Relations Code, 2020,” Ministry of Labour and Employment, No. 35 of 2020, enacted on 29 September 2020, available at: https://labour.gov.in/sites/default/files/IR_Code_Gazette.pdf

²⁰“The Occupational Safety, Health and Working Conditions Code, 2020,” Ministry of Labour and Employment, No. 37 of 2020, enacted on 28 September 2020, available at: https://labour.gov.in/sites/default/files/OSH_Gazette_2020.pdf

²¹The Code on Social Security, 2020,” Ministry of Labour and Employment, Act No. 36 of 2020, Bill No. 375 of 2019, enacted on 28 September 2020, available at: https://labour.gov.in/sites/default/files/SS_Code_Gazette_2020.pdf

²²“Government Makes the Four Labour Codes effective to Simplify and Streamline Labour Laws,” Ministry of Labour & Employment, Government of India, Press Release (Release ID: 2192463), 21 November 2025, available at: https://labour.gov.in/sites/default/files/pib2192463.pdf

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