IRDAI has decided to retain provisions for higher special surrender values (SSV) for endowment policies, benefiting policyholders who exit early by providing higher payouts. While life insurers opposed the move due to increased capital requirements and potential liquidity issues, IRDAI has allowed a maximum spread over the 10-year G-Sec yield for discounting purposes, slightly reducing the SSV.
Additionally, IRDAI mandates a Customer Information Sheet (CIS) with policy details and introduces penalties for insurers delaying compliance with ombudsman orders.
RBI is using short-term ‘buy-sell’ foreign exchange swaps to inject liquidity into the banking system ahead of large outflows due to advance tax payments. By purchasing US dollars and releasing rupees, the RBI is managing overnight borrowing costs and maintaining its inflation-fighting stance.
The central bank’s actions are timed with upcoming large government bond redemptions to ease liquidity tightness. These measures have resulted in a significant liquidity infusion and a decline in dollar-rupee forward premia, reflecting reduced hedging costs and interest rate differentials.
Linking UPI with RuPay credit cards has significantly boosted RuPay’s market share, with around 30% of new credit cards now on the RuPay network, up from 5% in 2022-23.
Large banks are increasingly issuing RuPay cards due to rising customer demand, including co-branded cards.
However, transaction growth has lagged behind issuance, and banks are concerned about losing valuable credit card customers to third-party payment apps like Google Pay and PhonePe, which might cross-sell other financial products to these customers.
Neobanking startup Jupiter, has received a prepaid payments instrument (PPI) licence from the Reserve Bank of India. This licence enables Jupiter to offer digital wallets for UPI payments, fund transfers, and bill payments.
