RBI, Sebi move to restore investor confidence: Indian regulators are fast-tracking financial sector reforms to regain investor confidence and attract capital after foreign investors pulled nearly USD 17 bn from equities this year, making India the worst-hit Asian market, Reuters reports, citing unnamed sources familiar with the matter.

Regulations ease, reforms up: The capital markets regulator, the Securities and Exchange Board of India (Sebi), and the Reserve Bank of India (RBI) have rolled out measures to ease listings, open credit lines for mergers, and simplify the process for foreign investor participation. More reforms — including expanded retail market access and relaxed banking regulations — are expected next year.

The Indian deregulation coincides with China’s recent easing initiatives, including opening its stock option market to foreign investors and expanding foreign access to its bond repurchase market, as per Reuters.

New leadership’s liberal tilt: The reform push comes under new leadership, as RBI Governor Sanjay Malhotra and Sebi Chair Tuhin Kanta Pandey, both former finance ministry officials, are reversing post-crisis restrictions seen as stifling investment. Indian banks can now fund acquisitions, lend more against listed securities, and face fewer capital constraints.

Growth outlook: With GDP forecast at 6.8% in FY26, investors like M&G and Fiera Capital say India’s liberalization drive signals a renewed, investor-friendly turn, the newswire added.

OTHER POLICY NEWS-

The RBI has proposed new limits on domestic lenders’ exposure to capital markets and corporate acquisition finance, aiming to tighten risk controls and prevent excessive exposure, Reuters reports.

Draft guidelines: The central bank proposes capping banks’ combined exposure to capital markets and acquisitions financing at 20% of their Tier-1 capital, which represents the strongest form of a bank’s capital base. Total capital market exposure, including indirect holdings through funds, guarantees, or underwriting, would be limited to 40% of Tier-1 capital, while exposure to acquisition finance would be capped at 10%.

Acquisition finance: Banks would be allowed to fund up to 70% of an acquisition deal, while the acquiring company must provide at least 30% equity. Such financing would be restricted to listed companies with a satisfactory net worth and a three-year profitability record.

The RBI also proposed revising risk-weight guidelines for infrastructure loans by non-banking financial companies, a move that could reduce capital requirements for lenders financing established infrastructure projects. The proposed exposure caps come as Indian banks expand their corporate loan portfolios amid rising deal activity in India.

DID YOU KNOW?-

Switzerland has been named the world’s most resilient country for investors in the 2025 Global Investment Risk & Resilience Index, published by Henley & Partners. Out of 226 countries, a cluster of small, high-governance economies — Denmark, Norway, Singapore, and Sweden — dominate the top five, demonstrating how predictability, low corruption, and institutional strength drive investor confidence.

India came in 155th, with high exposure to systemic risks and limited resilience capacity despite strong GDP growth. Faced with governance and infrastructural bottlenecks, India’s resilience score of 49.76 (out of 100) is the lowest among BRICS peers, trailing China (49th), Russia (94th), Brazil (150th), and South Africa (145th).

Gulf economies are performing strongly amid global uncertainty, with the UAE (38th) leading the region, followed by Qatar (51), Saudi Arabia (57), Kuwait (60), and Oman (73).

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