Banking

India’s banking regulator has approved SBI Mutual Fund’s proposal to acquire a stake in Bandhan Bank, marking an important regulatory milestone for both institutions. The clearance from the Reserve Bank of India (RBI) allows the country’s largest mutual fund house to deepen its exposure to the private banking space. The move is being closely watched by investors, as it reflects growing institutional confidence in Bandhan Bank’s long-term fundamentals amid ongoing efforts to strengthen governance, asset quality and growth prospects.

State-owned lender Canara Bank has successfully raised Rs. 5,000 crore through the issuance of bonds, reinforcing its capital position amid steady credit growth and evolving regulatory requirements. The fundraise reflects continued investor confidence in public-sector banks as balance sheets improve and asset quality stabilizes. Proceeds from the bond sale are expected to support business expansion while ensuring compliance with capital adequacy norms.

HSBC’s India operations delivered a robust financial performance in 2025, with profit rising 11 percent year-on-year to $1.9 billion, reflecting sustained growth across core banking segments. The increase was driven by higher interest income, steady credit demand and disciplined cost management, even as global banking conditions remained challenging. Executives said India continues to stand out as a key growth market within HSBC’s global network, supported by economic resilience and expanding corporate and wealth activity.

Global rating agency Fitch Ratings has affirmed the credit ratings of Punjab National Bank and Bank of Baroda, retaining a stable outlook for both lenders. The decision reflects sustained improvement in asset quality, stronger capital buffers and consistent government support for India’s public-sector banking system. Fitch noted that while challenges remain from legacy stressed assets and operating efficiency, the overall risk profile of these banks has improved meaningfully.

The Reserve Bank of India’s Monetary Policy Committee has indicated that an interest rate hike is unlikely in the near term, signaling a cautious approach as it balances inflation management with economic growth. Policymakers appear comfortable with the current monetary stance, citing moderating price pressures and resilient domestic demand. While vigilance remains high amid global uncertainty, the central bank has emphasized continuity and predictability in policy.

India does not currently have a defined roadmap for further mergers among public sector banks, Finance Minister Nirmala Sitharaman said, signaling a pause in consolidation efforts that reshaped the banking landscape in recent years. The government’s focus, she emphasized, is now on strengthening existing institutions through improved governance, credit growth, and financial inclusion rather than structural amalgamations.

Canara Bank has announced plans to raise ₹5,000 crore through a bond issuance aimed at strengthening its capital adequacy and supporting growth initiatives. The capital infusion is expected to enhance the bank’s Tier-II capital, providing greater flexibility for lending, infrastructure financing, and strategic expansion. Analysts view the move as a proactive step to reinforce financial stability and maintain regulatory compliance amid evolving asset quality and risk management requirements.

IDFC Bank has transferred ₹583 crore to the Haryana government, reflecting strong compliance with statutory obligations and a collaborative approach to state finances. The remittance, part of revenue-sharing and dividend arrangements, highlights the bank’s robust profitability and disciplined capital management. Analysts note that such transfers not only enhance the fiscal capacity of the state but also signal investor confidence in IDFC Bank’s governance and operational strength.

AU Small Finance Bank has rejected allegations of misconduct following regulatory restrictions imposed in Haryana, asserting that its operations remain compliant with applicable laws and banking norms. The lender said it is engaging with authorities to address concerns and restore normal business activity in the state. The development has drawn market attention, highlighting the heightened scrutiny facing financial institutions amid tighter oversight.

State Bank of India has announced an ambitious objective to allocate 10% of its total lending portfolio to green advances by 2030, signaling a major push toward sustainable finance. The bank plans to focus on renewable energy, energy-efficient projects, and environmentally responsible infrastructure, aligning lending practices with global ESG standards. Analysts note that this move not only positions SBI as a leader in climate-conscious banking but also reflects India’s broader commitment to sustainable development goals.