On April 16, 2025, the Reserve Bank of India (RBI) and New Delhi (Delhi) based Financial Intelligence Unit-India (FIU-IND) under the Department of Revenue (DOR), Ministry of Finance (MoF) signed a Memorandum of Understanding (MoU) to enhance coordination in implementation of the Prevention of Money Laundering Act, 2002 (PMLA) and its associated rules.
- The MoU was signed by Vivek Aggarwal, Director of FIU-IND, and R. Laksmi Kanth Rao, Executive Director (ED) of the Department of Regulation, RBI.
Highlights of the MoU:
i.Exchange of intelligence and database information, establishing a reporting framework for entities submitting data to FIU-IND under the PML Rules, and conducting training and outreach activities.
ii.To strengthen Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) skills and assess Money Laundering/Terror Financing (ML/TF) risks across financial sectors.
iii.Monitor compliance of RBI-regulated entities with PMLA, RBI guidelines, and global standards, and quarterly meetings for issue discussion are key features of the agreement.
RBI Cancels Licence of Colour Merchants Co-operative Bank
On April 16, 2025, RBI cancelled the licence of Ahmedabad (Gujarat) based Colour Merchants Co-operative Bank Limited due to inadequate capital adequacy, poor earnings prospects, and non-compliance with Section 11(1) and Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949.
- The Registrar of Cooperative Societies, Gujarat, has been requested to issue a winding-up order and appoint a liquidator.
- The bank is barred from accepting deposits or conducting banking activities under Section 5(b) of the Banking Regulation Act.
i.As per Section 18A of the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961, every depositor will be eligible to receive up to Rs 5 lakh.
ii.About 98.51% of depositors are expected to receive the full insured amount of their deposits.
iii.As of March 31, 2024, Rs 13.94 crore has already been disbursed by DICGC to eligible depositors.
RBI Imposes Penalties on KMBL, IDFC First Bank, and PNB
On April 17, 2025, the RBI imposed monetary penalties on three prominent Indian banks for deficiencies in regulatory compliance.
- Mumbai (Maharashtra) based Kotak Mahindra Bank Limited (KMBL) – Rs. 61.4 lakh for non-compliance with ‘Loan System for Delivery of Bank Credit’ and ‘Loans and Advances – Statutory and Other Restrictions’.
- Mumbai-based IDFC First Bank Limited – Rs. 38.6 lakh for violation of Know Your Customer (KYC) guidelines.
- New Delhi-based Punjab National Bank (PNB) – Rs. 29.6 lakh for non-compliance with Customer Service in Banks directions.
UK-Based Revolut Secures RBI Approval for Domestic Payments in India
In April 2025, London (United Kingdom, UK) based Revolut, a global financial application (App) received full authorization from the RBI to operate as a Prepaid Payment Instrument (PPI) issuer and enable Unified Payments Interface (UPI) transactions in India. This approval follows its in-principle licence received in April 2024.
- With the PPI licence, Revolut India will offer domestic wallets, prepaid cards, and expand its international multi-currency offerings.
- The company already holds a Category-II Authorised Money Exchange Dealer (AD II) licence, providing foreign exchange cards and cross-border remittance services.
- This development makes Revolut a full-fledged domestic FinTech player in India’s expanding digital payments space.
Types of Digital Payments:
1.Unified Payments Interface (UPI)
Unified Payments Interface (UPI) is a real-time digital payment system that enables fund transfers between bank accounts using mobile apps such as PhonePe, Google Pay, and Paytm. It is regulated and operated by the National Payments Corporation of India (NPCI).
- The general UPI transaction limit is Rs. 1 lakh per day (varies by bank)
2.UPI Lite:
UPI Lite is a simplified version that allows small-value transactions without using a UPI Personal Identification Number (PIN)
- Transaction limit – Rs. 1,000 per transaction
3.Unstructured Supplementary Service Data (USSD) – 99# Service
Unstructured Supplementary Service Data (USSD) is a mobile banking service that allows users with feature phones (non-smartphones) to access banking services without internet connectivity. Dial *99# on your mobile to access UPI services
- Transaction limit – Rs. 5000 per transaction.
4.Aadhaar Enabled Payment System (AEPS):
Aadhaar Enabled Payment System (AEPS) is a payment solution that uses the 12-digit Aadhaar number linked to the customer’s bank account for carrying out basic banking operations such as cash withdrawals, balance enquiries, and fund transfers.
- Transaction limit – Rs. 10,000 per transaction
