The Securities and Exchange Board of India has enforced a rigorous overhaul of the Merchant Banker Regulations. Under these new rules, merchant banks are required to maintain significantly higher capital adequacy and liquid net worth. For Category I merchant bankers, the minimum net worth requirement is set to escalate in a phased manner, ultimately reaching ₹50 crore by 2028. This strategic move is designed to fortify the primary market ecosystem, ensuring that firms facilitating capital-raising activities possess the financial resilience necessary to protect investors. The regulations also mandate the appointment of independent compliance officers, effectively ring-fencing non-regulated activities from core banking operations to mitigate systemic risks.
RBI Enforces Strict Dormant Account Closure Rules
At the same time, the Reserve Bank of India has launched a major national banking system cleanup drive. The identification of Dormant and Inactive Accounts and closing those have begun this week by banks that have not been subjected to customer-initiated transactions for over two years. The policy is part of a broader effort to increase Digital Banking Safety and ultimately cut down the administrative burden of managing “ghost” accounts that are most susceptible to hacking for fraud. Bank customers with accounts that bear no balance or have not been active for a long time are being notified by the bank to either engage in at least one digital transaction or update their KYC (Know Your Customer) details immediately to avoid automatic deactivation of their accounts.
Credit Growth Surge Driven by Secured Lending
The banking industry is witnessing a major change in credit usage patterns. The latest statistics show that Gold Loans and Secured Credit have increased by an incredible 125% in comparison to the previous year, thus totally surpassing the lending to the traditional industry. While big corporations have been raising money primarily through bond markets, banks have changed their direction and started focusing on lending to small-ticket and priority sectors. This shift is the main reason for the estimated credit growth of 12% in fiscal year 2026. Additionally, along with the official announcement of the January 2026 bank holiday calendar, which includes today’s closure in Uttar Pradesh for Hazrat Ali’s birthday, the RBI keeps on grinding further and further, by making 24/7 digital channels the norm in order to secure uninterrupted Financial Stability all over the country.