Banking News for August 2026
Bank of Maharashtra Expands Loan Book by 27% as Deposits Rise 13%
Public sector lender Bank of Maharashtra recorded strong growth in its lending portfolio, with total advances increasing 27% year-on-year to Rs. 3.06 trillion. The growth was supported by expansion across retail, agriculture and MSME segments, collectively known as RAM loans.
The bank’s RAM portfolio grew 25% during the period to reach Rs. 1.87 trillion, reflecting continued focus on retail customers, farmers and small businesses. Corporate lending also witnessed healthy momentum, with domestic corporate loans rising 21% year-on-year to Rs. 1.11 trillion.
On the funding side, the bank’s total deposits increased 13% annually to Rs. 3.44 trillion. However, the proportion of low-cost current account and savings account (CASA) deposits moderated slightly to 49% compared with 50% in the corresponding period last year.
The performance highlights the lender’s continued credit expansion while maintaining steady deposit mobilisation. Bank of Maharashtra’s growth in priority lending segments indicates its focus on supporting retail borrowers, MSMEs and corporate customers.
Bank of Baroda Settles NMC Health Dispute With $600 Million Payment
Bank of Baroda has reached a settlement in the long-running legal dispute related to the collapse of UAE-based healthcare company NMC Health, agreeing to pay $600 million, approximately Rs. 5,700 crore, to the company’s administrators.
The settlement concludes proceedings initiated by administrators of NMC Health Plc, NMC Healthcare Ltd and NMC Holding Ltd before courts in Abu Dhabi Global Market and the High Court of England and Wales. The dispute was linked to the financial crisis faced by NMC Healthcare, which entered administration in 2020 after the discovery of significant undisclosed debt.
The bank clarified that the agreement was reached through an out-of-court settlement and does not represent any admission of liability or wrongdoing by Bank of Baroda.
NMC Healthcare, founded by Indian-origin entrepreneur B.R. Shetty, was once one of the largest healthcare providers in Abu Dhabi. Following its collapse, administrators initiated recovery proceedings against multiple parties, including the Indian lender, over alleged contributions to the company’s financial distress.
Rajiv Kumar Appointed Part-Time Chairman of HDFC Bank for Three Years
The Reserve Bank of India has approved the appointment of former Chief Election Commissioner Rajiv Kumar as part-time chairman of HDFC Bank for a three-year period. The appointment will be effective from July 15, 2026, according to a regulatory filing by the private sector lender.
Keki Mistry, who was serving as interim chairman, will continue on the bank’s board as a non-executive non-independent director. Rajiv Kumar has previously held key government positions, including Finance Secretary and Secretary in the Department of Financial Services.
During his tenure at the finance ministry, Kumar was associated with several banking sector reforms, including measures aimed at improving transparency in non-performing asset recognition, strengthening accountability and restoring credit discipline.
HDFC Bank highlighted his contribution to financial sector reforms, including initiatives linked to the “4R strategy” of Recognition, Resolution, Recapitalisation and Reforms. The bank expects his experience in policy and governance to support its leadership framework.
Central Bank of India Starts IFSC Banking Operations at GIFT City
Central Bank of India has commenced operations of its International Financial Services Centre (IFSC) Banking Unit at Gujarat International Finance Tec-City (GIFT City), expanding its ability to provide international banking solutions to corporate customers.
The new unit will focus on meeting the foreign currency financing requirements of businesses through products such as overseas loans, trade finance facilities, treasury services and risk management solutions.
According to the bank, the IFSC Banking Unit will enable corporate clients to access a wider range of financial products designed to support their global business requirements and cross-border transactions.
The launch strengthens Central Bank of India’s presence in the growing international financial services ecosystem at GIFT City. Indian banks have been expanding their operations in the IFSC zone to provide specialised services and support the country’s ambitions of developing a globally competitive financial centre.
Canara Bank Pays Rs. 2,397 Crore Dividend to Government for FY26
Canara Bank has paid a dividend of Rs. 2,397 crore to the Government of India for the financial year 2025-26, with the dividend cheque being presented to Union Finance Minister Nirmala Sitharaman.
The Bengaluru-based public sector lender had declared a dividend of Rs. 4.20 per equity share for the financial year. The payout reflects the bank’s improved financial performance and its focus on delivering value to shareholders, including the government.
Canara Bank reported its highest-ever annual net profit of Rs. 19,187 crore during FY26, compared with Rs. 17,027 crore in the previous financial year, registering a growth of 12.69% year-on-year.
The Government of India remains the majority shareholder in the bank, holding a 62.93% stake. The dividend payment strengthens government receipts while highlighting the improved profitability of public sector banks following years of balance sheet strengthening and operational reforms.
SBI Mobilises Over $1.5 Billion Through Foreign Currency Deposits
State Bank of India has raised more than $1.5 billion through foreign currency deposits under a special mobilisation programme launched for overseas Indian customers, according to people familiar with the development.
The country’s largest lender is also offering a leverage facility of nine times to eligible depositors, allowing customers to increase the amount they can place under the scheme. The details of the programme remain private, according to sources.
The initiative follows the Reserve Bank of India’s decision to provide full support for hedging costs on three-to-five-year foreign currency deposits raised by banks. The move was aimed at encouraging banks to attract overseas funds and strengthen foreign exchange reserves.
Several lenders have intensified efforts to tap India’s large diaspora base by offering competitive interest rates on FCNR(B) deposits and expanding outreach in overseas markets, including the Middle East, Singapore and London.
RBI Extends Timeline for Digital Fraud Compensation Framework
The Reserve Bank of India has finalised its framework for protecting customers against fraudulent electronic banking transactions while providing banks additional time to implement the new requirements. The directions will now become effective from January 1, 2027, instead of the earlier proposed date of July 1, 2026.
Under the revised framework, banks will receive more time to investigate complaints, assess customer liability and communicate decisions. The final directions allow up to 45 days for domestic digital fraud cases and up to 60 days for cross-border transactions, compared with the 30-day timeline proposed earlier.
The framework retains compensation provisions for eligible small-value digital fraud cases. Individual customers, including sole proprietors, who suffer losses up to Rs. 50,000 due to fraudulent electronic transactions caused by customer negligence may receive compensation of 85% of the net loss, subject to a maximum limit of Rs. 25,000.
To qualify, customers must report incidents to their bank and through the National Cybercrime Reporting Portal or helpline 1930 within five calendar days. The compensation mechanism can be used only once during a customer’s lifetime, with RBI, the customer’s bank and beneficiary bank sharing the payout responsibility.
RBI Allows Banks to Provide Loans Against FCNR(B) Deposits Raised Under Swap Scheme
The Reserve Bank of India has clarified that banks, including their overseas branches, can provide loans to non-residents against Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits mobilised under the special swap facility introduced recently. Banks may also issue standby letters of credit in favour of overseas lenders against such deposits.
The central bank has not prescribed any specific leverage limit for these loans, leaving individual banks to determine the lending structure. Some lenders, including State Bank of India, are offering leverage of up to nine times, while similar arrangements in the past had seen leverage levels between five and nine times.
Under the mechanism, customers can use their FCNR(B) deposits as collateral to access additional funding. For instance, a $1 million deposit could enable a customer to obtain further credit, depending on the bank’s lending policy.
The RBI introduced the facility to encourage foreign currency inflows and strengthen foreign exchange reserves amid volatility in currency markets. The move followed pressure on the rupee after geopolitical developments and a decline in reserves from their recent peak levels.
Indian Banks Pursue Overseas Ratings to Expand Foreign Funding Access
Indian banks are increasingly seeking international credit ratings as they look to access global funding markets and strengthen their foreign currency deposit mobilisation capabilities. The trend has gained momentum with lenders exploring FCNR(B)-linked fundraising opportunities and other overseas borrowing avenues.
Federal Bank recently received its first international issuer ratings from S&P Global Ratings, with a long-term rating of BBB- with a stable outlook and a short-term rating of A-3. The investment-grade assessment is expected to support the bank’s ability to raise funds from international investors.
Other lenders have also moved towards strengthening their global credit profile. YES Bank received a fresh international rating from S&P, which highlighted improving asset quality and support from strategic shareholder SMBC as key factors behind the assessment.
Industry experts believe global ratings have become increasingly important for banks seeking foreign currency bonds, overseas investors and non-resident deposits. Such ratings provide greater confidence to international lenders and may help banks access overseas capital at more competitive costs.
Bank Credit Growth Climbs to Two-Year High as Lending Accelerates
Credit growth across commercial banks accelerated to an 18.6% year-on-year increase during the fortnight ended June 27, marking the highest pace in nearly two years. The rise came as lenders expanded loan disbursements and strengthened their balance sheets ahead of the quarter-end period.
According to Reserve Bank of India data, banks added around Rs. 3.8 trillion to their loan books during the fortnight, while deposits increased by nearly Rs. 6.97 trillion. The deposit mobilisation was among the strongest fortnightly increases recorded in nearly three decades.
SBI Research noted that the sharp rise in deposits could partly reflect increased inflows through FCNR(B) deposits, external commercial borrowings and overseas foreign currency borrowings.
Loan growth was also supported by increased lending activity under government-backed credit support programmes. The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 has witnessed significant demand among micro, small and medium enterprises, with more than 140,000 guarantees worth over Rs. 1.55 trillion issued since its launch.
World Bank Approves $890 Million Funding Package for India’s Rooftop Solar Expansion
The World Bank has approved a financing package of $890 million to support India’s rooftop solar programme, aimed at accelerating solar adoption among households. The package includes an $820 million loan from the International Bank for Reconstruction and Development, a $60 million concessional loan from the Clean Technology Fund and a $10 million grant.
The global lender will also help mobilise an estimated $4.2 billion in private sector financing through commercial loans to enable households to install rooftop solar systems. The funding will support the government’s PM Surya Ghar: Muft Bijli Yojana, which targets rooftop solar installations across 10 million rural and urban households.
The programme is expected to reduce electricity costs for consumers while supporting domestic manufacturing and creating around 1.7 million employment opportunities across solar manufacturing, installation and related services.
The World Bank said the initiative will address financial barriers, improve participation of banks and distribution companies, and strengthen the rooftop solar ecosystem. The latest support builds on previous World Bank funding that helped India expand rooftop solar capacity from about 500 MW to more than 27 GW.
NABARD Supports GI Registration of 28 Traditional Products
The National Bank for Agriculture and Rural Development (NABARD) has facilitated the Geographical Indication (GI) registration of 28 traditional products, including handicrafts, handloom items, bamboo crafts and other region-specific products from different parts of India.
The newly recognised products include Nalanda Bawanbuti Saree and Fabrics and Gaya Pattharkatti Stone Craft from Bihar, Kuchai Silk Saree from Jharkhand, Ba Shilp bamboo craft and Bihu Pepa from Assam, along with traditional products from several other states.
With these additions, NABARD has supported GI registration for 176 products so far. The initiative aims to protect traditional knowledge, improve market opportunities for artisans and strengthen rural enterprises linked to indigenous products.
NABARD said its GI-based programmes have connected more than 13,000 artisans and producers with higher-value markets and generated over 50,000 direct employment opportunities. The organisation is also supporting producer groups, skill development, branding, market access and export promotion to enhance the commercial potential of India’s traditional products.
Standard Chartered Reduces India Branch Network as Wealth Focus Grows
Standard Chartered has reduced its branch presence in India from nearly 100 locations to around 80 over the past year as part of a strategy to strengthen its focus on wealth management and affluent banking services.
The foreign lender has consolidated branches located close to each other and exited some standalone locations as part of a network optimisation exercise. However, the bank has retained the regulatory licences associated with these branches, allowing potential redeployment in the future.
The move reflects a broader shift among foreign banks operating in India, where competition from domestic lenders has made traditional retail banking more challenging. Standard Chartered continues to maintain the largest branch network among foreign banks in India operating under the branch model.
The bank said the consolidation is aimed at moving towards deeper customer relationships by expanding wealth and affluent banking services. It plans to increase priority banking centres within existing branches and invest in wealth centres, digital platforms and relationship managers to support premium customer segments.
Supreme Court Says Banks Cannot Blacklist Lawyers Over Negligence Allegations
The Supreme Court has ruled that banks and the Indian Banks’ Association (IBA) cannot place advocates on a caution list merely based on allegations of professional negligence. The judgment emphasised the independence of the legal profession and held that disciplinary action against lawyers falls within the authority of statutory Bar Councils.
A bench comprising Justices P S Narasimha and Alok Aradhe observed that blacklisting advocates by banks would amount to interference with the disciplinary jurisdiction of the Bar Council. The court also directed the Bar Council of India (BCI) to constitute a panel of senior and junior advocates along with experts to examine the possibility of establishing a National Legal Academy for lawyers.
The judgment also clarified the scope of judicial review under Article 226 of the Constitution. It held that writ petitions can be maintained against the IBA, noting that the term “any person or authority” under Article 226 has been interpreted broadly and is not limited only to statutory bodies or entities covered under Article 12.
The ruling reinforces the role of professional bodies in regulating legal practitioners while placing limits on institutional actions against advocates without due disciplinary process.
