September 2026 – At a Glance

• SEBI’s Board, at its 215th meeting on 24 September 2026, approved new Portfolio Managers Regulations, new Settlement Regulations, a Common Advertisement Code and an enabling framework for Depository Receipts on REIT and InvIT units.
• The RBI proposed a standard operating procedure for temporary debit holds (capped at 60 days) on suspected money-mule accounts, extended the certified-KYC-copy facility to FPIs and issued Basel III market-risk directions effective 1 April 2027.
• The Supreme Court declined to stay the merchant discount rate on specified UPI merchant payments above ₹2,000, which takes effect on 15 October 2026, and called for responses from the Centre, RBI and NPCI.
• The EPFO wage ceiling for mandatory coverage was raised from ₹15,000 to ₹25,000 per month with effect from 17 September 2026, with a consequential amendment to the Employees’ Pension Scheme, 2026.
• The CBDT extended the tax audit report deadline to 21 October 2026 and the ITR deadline for audit cases to 21 November 2026; the 57th GST Council meeting was rescheduled to 7 October 2026.
• Key judicial developments included rulings on arbitral seat versus venue, the NCLT’s power to recall fraudulently initiated insolvency proceedings, CBDT circulars not binding courts, and a larger-bench reference on trade mark suit jurisdiction.

Editor’s Note

September 2026 was driven principally by regulators, the Executive and the courts, with comparatively less legislative activity at the Union level following a busy August.

SEBI’s Board meeting produced the month’s most substantial package of reforms, spanning portfolio management, settlement of enforcement proceedings, advertising, REITs, InvITs, AIFs and accredited investors. The RBI continued its work on fraud prevention and prudential standards, while the introduction of a merchant discount rate on selected UPI payments drew early judicial attention. Employers must also now account for the higher EPFO wage ceiling.

This edition highlights principal legal, regulatory and judicial developments from 1 September to 30 September 2026 that may have practical implications for businesses, investors, financial institutions, technology companies and multinational corporations operating in India. Items that are proposals, Board approvals or pending references are identified as such and do not yet have the force of law.

Corporate Law & Governance

Corporate Laws (Amendment) Bill, 2026 Remains Pending

Following the Joint Parliamentary Committee’s report of 3 August 2026, the Bill had not been passed by Parliament as at 30 September 2026. The existing provisions of the Companies Act, 2013 and the LLP Act, 2008 therefore continue to apply.

Companies Compliance Facilitation Scheme, 2026 Closes

By General Circular No. 04/2026 dated 31 August 2026, the Ministry of Corporate Affairs extended CCFS-2026 until 15 September 2026, with all other terms unchanged. We have not identified any further extension; companies with pending filings should assume that the normal additional fees now apply.

Bombay High Court: Board Authorisation Required to Institute Company Complaints

In Nilesh Suryakant Jangam v. State of Maharashtra, the Bombay High Court held that a Director or Vice-President cannot institute a complaint on behalf of a company without Board authorisation, and quashed the proceedings against an employee. Companies should ensure that authorisations for initiating criminal complaints are properly documented.

Banking & Financial Regulation

RBI Proposes SOP for Temporary Debit Holds on Suspected Money-Mule Accounts

On 11 September 2026, the RBI issued draft KYC Amendment Directions, 2026 following a Supreme Court order of 4 August 2026 directing it to prescribe a standard operating procedure for such cases. Under the draft, banks would place a temporary debit hold on suspected money-mule transactions or accounts; the hold would lapse if no instruction from a law enforcement agency or competent authority is received within 30 days, and in any event would not exceed 60 days in the absence of such an instruction. Account holders would have 20 days to explain the transaction and complaints would have to be resolved within 30 days. Comments were invited until 2 October 2026 and the draft proposes effect from 1 April 2027, although banks may implement it earlier.

RBI Extends Certified KYC Copy Facility to FPIs

By amendment directions dated 18 September 2026, issued for commercial banks and parallel categories of banks, the RBI extended to Foreign Portfolio Investors the alternative mechanism of certified copies of identification documents that was already available for NRIs and Persons of Indian Origin. The directions took effect immediately.

RBI Issues Basel III Market Risk Directions

The RBI issued the Reserve Bank of India (Commercial Banks – Minimum Capital Requirements for Market Risk) Directions, 2026, adopting the Simplified Standardised Approach and revising treatment of trading book positions, foreign exchange risk, specific interest rate risk, debt mutual funds and ETFs, and positions hedged through credit derivatives. The Directions take effect from 1 April 2027.

RBI Recognises Unified Fintech Forum as Self-Regulatory Organisation

The RBI recognised the Unified Fintech Forum as a Self-Regulatory Organisation for the FinTech sector (SRO-FT), the second such recognition after the FinTech Association for Consumer Empowerment in August 2024.

Monetary Policy and Special Swap Facility

No Monetary Policy Committee meeting was held in September; the policy repo rate remains 5.25% following the August review, and the next announcement is expected on 7 October 2026. The RBI’s special USD-INR swap facility for FCNR(B) deposits closed on 31 August 2026, while the window for ECBs and OFCBs remains open until 31 December 2026.

IRDAI Consults on Public Insurance Registry

IRDAI issued a consultation paper proposing a Public Insurance Registry as digital public infrastructure for the insurance sector, with comments invited until 30 September 2026.

Payments & Fintech

UPI Merchant Discount Rate to Take Effect on 15 October 2026

The Department of Financial Services issued FAQs on the MDR framework for select UPI person-to-merchant transactions. From 15 October 2026, an MDR of 0.4% will apply to specified transactions above ₹2,000, capped at ₹300 for payments of ₹75,000 and above. Person-to-person transactions remain free, small merchants receiving up to ₹1 lakh per month continue at zero MDR, a flat ₹5 applies to specified sectors such as insurance, telecom, fuel and railways, and 0.02% applies to capital market transactions.

On 28 September 2026, a Supreme Court bench headed by the Chief Justice, hearing a public interest litigation, issued notice to the Centre, RBI and NPCI, directed counter affidavits within four weeks, and declined to grant an interim stay, observing that the issue appeared more technical than legal.

NPCI Issues Consolidated UPI Circular

NPCI issued UPI Consolidated Circular, Version 1.0, consolidating operating circulars issued up to 31 July 2026 and withdrawing a large number of legacy circulars. It covers governance, security, dispute resolution, settlement and compliance requirements, including annual CERT-In audits for PSPs and PPI issuers.

Capital Markets & Securities Regulation

The measures below were approved by SEBI’s Board on 24 September 2026 (Press Release No. 59/2026). Regulations and circulars will follow, and the changes take effect only on notification.

New SEBI (Portfolio Managers) Regulations, 2026

The new Regulations will replace the 2020 Regulations. Key measures include investment in IPOs and primary debt issuances; up to 10% of client AUM in investment-grade unlisted NCDs under discretionary services with client consent; exchange-traded derivatives up to 1.25 times client AUM; investment in foreign securities; the Portfolio Managers Route for Investing in Mutual Funds (PRIM) with a minimum ticket of ₹25 lakh; Independent Fund Managers; graduates eligible as principal officers; and relaxed dealing-room requirements for portfolio managers with AUM below ₹100 crore. SEBI states that the text has been cut from 70 to 33 pages.

New SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026

The new framework introduces a formula-based settlement amount linked to the minimum penalty, separate disgorgement of wrongful gains, a pre-show-cause settlement notice allowing 60 days to apply, an extended window of 90 days after a show cause notice, a fast-track route for settlements up to ₹10 lakh and certain disclosure violations, and a one-time 90-day window carrying an additional 20% settlement amount. The Regulations come into force on the day after the 30th day from notification. SEBI also approved a fourth Settlement Scheme for non-genuine trades in illiquid stock options on BSE.

Depository Receipts and Ease of Doing Business for REITs and InvITs

The Board approved an enabling provision for Depository Receipts on REIT and InvIT units, to be listed initially in the IFSC and open to all foreign investors including NRIs, with the detailed framework to follow by circular. It also changed the unitholder approval threshold from 75% of all units to 75% of votes cast, clarified exit offers on change of sponsor (with dissenting unitholders defined as those voting against), allowed minimum public unitholding to be restored within one year after an exit offer, and recognised remote common infrastructure as real estate.

Other Board Decisions

A Common Advertisement Code will replace entity-specific frameworks for stock brokers, depository participants, investment advisers, research analysts, online bond platform providers, portfolio managers and mutual funds, permitting celebrity-led brand promotion with safeguards and replacing prior approval with post-issuance reporting within three working days. FPIs will be allowed in non-agricultural index derivatives and non-cash-settled non-agricultural commodity derivatives, subject to exiting before the tender period. The Vault Managers Regulations will extend to bullion underlying ETFs and derivatives, with minimum net worth raised from ₹50 crore to ₹75 crore. Mandatory listing of outstanding unlisted NCDs on a first listing will be removed; protection against use of trust assets for fund manager liabilities will extend to all AIF structures; and the accredited investor framework will add manager-led accreditation, a securities-market-exposure criterion (₹5 crore for individuals, ₹20 crore for bodies corporate), deemed accreditation for non-residents including FPIs, and eligibility for LLPs.

Other SEBI and IFSCA Developments

SEBI launched the Demat 2.0 pilot for tokenised corporate bonds, issued a consultation paper on net settlement of mutual fund cash market transactions, and announced a review of derivatives settlement price methodology following the Closing Auction Session introduced on 3 August 2026. The first phase of the Samuhik Prativedan Manch for clearing members took effect on 30 September 2026. IFSCA notified the Prohibition of Market Abuse in Securities Markets Regulations, 2026, the Electronic Trading Platforms Regulations, 2026 and amendments to the Fund Management Regulations.

Insolvency & Bankruptcy

Supreme Court: NCLT May Recall Fraudulently Initiated CIRP

In Greenopolis Welfare Confederation v. Rakesh Kumar Gupta, the Supreme Court held that the NCLT can recall an order admitting insolvency proceedings where the jurisdictional facts were affected by fraud or collusion, while clarifying that such a finding does not automatically terminate the CIRP.

Other Supreme Court and NCLAT Rulings

The Supreme Court held that time extension charges imposed for a defaulting developer’s delay are penal and cannot be passed on to homebuyers as CIRP costs, and held that a litigant cannot be left remediless where a tribunal’s e-filing system fails despite a bona fide attempt within limitation. It also reserved judgment on whether the NCLT may permit withdrawal of an application for approval of a resolution plan after Committee of Creditors approval. The NCLAT clarified that, under the 2026 IBC amendment, withdrawal of an admitted CIRP is barred before constitution of the CoC and after the first invitation for resolution plans.

Intellectual Property & Technology

AI, Data and Telecom Regulation

TRAI notified the Telecom Commercial Communications Customer Preference (Third Amendment) Regulations, 2026, requiring telecom service providers to use AI/ML-based systems to identify suspected spam senders and share information across operators, with action against repeatedly flagged numbers including re-verification and disconnection. The Ministry of Finance also sought banks’ inputs on AI-based loan collection tools. Businesses deploying AI should factor governance, accountability and customer protection into their design.

Consumer & Product Regulation

CCPA Penalises Rapido for Pre-Ride Tipping Prompts

The Central Consumer Protection Authority held that Rapido’s pre-ride tipping prompts created a misleading impression that paying above the quoted fare improves the likelihood of ride confirmation, in violation of the Consumer Protection Act, 2019 and the Dark Patterns Guidelines, 2023. It directed discontinuation of the prompts and imposed a penalty of ₹10 lakh.

Supreme Court Reserves Order on Front-of-Pack Warning Labels

After seeking further information on 10 September 2026, a Supreme Court bench reserved its order on 28 September 2026 on pleas for front-of-pack warning labels on packaged foods high in sugar, salt and fat. As reported, FSSAI has proposed a two-step approach with about four months for notifying guidelines and mandatory implementation within a year.

Employment & Labour

EPFO Wage Ceiling Raised to ₹25,000

The Union Cabinet approved on 16 September 2026 an increase in the wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000 per month, effective 17 September 2026, expected to bring over 51 lakh additional employees within EPF, EPS and EDLI coverage. By notification dated 25 September 2026 (G.S.R. 847(E)), the Employees’ Pension Scheme, 2026 was amended, with effect from 17 September 2026, to cover EPF members who were not EPS members and whose wages on the date of the new ceiling do not exceed it. Employers should review each employee’s EPS history before determining applicability and update payroll.

Environment & Sustainability

MoEFCC Notification on Pending Ex-Post Facto Environmental Clearance Proposals

By a notification dated 29 September 2026, the MoEFCC provided for processing of pending regularisation proposals under the 2017 notification and 2021 office memorandum in line with the Supreme Court’s judgment of 29 July 2026, while closing the window for fresh proposals. Prior environmental clearance remains the rule.

Practical Takeaways for Businesses

• Banks and NBFCs should review the draft money-mule debit hold SOP, the revised KYC directions for FPIs and the Basel III market-risk requirements applicable from 1 April 2027.
• Merchants, PSPs and acquirers should prepare for the UPI MDR from 15 October 2026 and monitor the Supreme Court proceedings.
• Portfolio managers, REITs, InvITs, AIFs, FPIs and intermediaries should prepare for SEBI’s regulations and circulars following the 24 September Board decisions.
• Employers should update payroll and PF/EPS processes for the ₹25,000 wage ceiling and review contract labour structures in light of the gratuity ruling.
• Taxpayers subject to audit should note the 21 October 2026 and 21 November 2026 deadlines.
• Companies should confirm Board authorisation for criminal complaints and review the status of any filings that were pending under CCFS-2026.
• Parties to commercial contracts should expressly designate the seat of arbitration.
• Lenders and creditors should review the Supreme Court and NCLAT positions on recall of CIRP admissions, withdrawal and CIRP costs.
• Digital platforms should review user interfaces for dark patterns, and food businesses should monitor front-of-pack labelling.
• Projects with environmental clearance exposure should assess the 29 September MoEFCC notification.

Looking Ahead

Businesses should particularly monitor:

• the RBI Monetary Policy Committee announcement expected on 7 October 2026;
• the 57th GST Council meeting on 7 October 2026 and any process reforms announced;
• implementation of the UPI MDR from 15 October 2026 and the Centre’s response before the Supreme Court;
• final RBI KYC directions on debit holds, the RBI’s 1 October 2026 directions on simplified approvals for acquisitions of major shareholding in banks by mutual funds, insurers and pension funds, and finalisation of the draft FEMA Foreign Investment Rules, 2026;
• notification of SEBI’s Portfolio Managers and Settlement Regulations and the Depository Receipt framework for REITs and InvITs;
• the Corporate Laws (Amendment) Bill, 2026 and constitution of the National Tribunals Commission;
• commencement of the consent manager provisions under the DPDP Rules, 2025, due around November 2026;
• the Supreme Court’s judgments in the seven-judge reference on State surcharges, the front-of-pack labelling matter and the larger-bench reference on trade mark suit jurisdiction; and
• the tax audit and ITR deadlines of 21 October and 21 November 2026.

Closing Note

India’s legal and regulatory landscape continues to evolve, with regulators and courts placing increasing emphasis on ease of doing business, fraud prevention, investor protection, digital payments, social security coverage and regulatory accountability.

The developments highlighted in this edition demonstrate the importance of proactive compliance and continuous monitoring of legislative, regulatory and judicial developments affecting business operations, investment structures and commercial decision-making.

At KBD Partners, we remain committed to helping clients navigate these developments through commercially focused legal advice and strategic regulatory guidance. We hope this edition of the KBD Monthly Monitor provides valuable insights into the evolving legal landscape and assists businesses in making informed decisions.

KBD Partners

Email: mailbox@kbdlawpartners.com

About KBD Partners

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Our lawyers combine technical legal expertise with commercial understanding to provide practical, solution-oriented advice tailored to clients’ business objectives. We regularly advise corporations, financial institutions, investors, start-ups, promoters and high-net-worth individuals on complex transactions, regulatory matters and strategic disputes.

With a commitment to excellence, responsiveness and client service, KBD Partners strives to deliver high-quality legal solutions that help clients navigate evolving legal and business challenges with confidence.

Disclaimer

This publication has been prepared by KBD Partners for informational purposes only and does not constitute legal advice, solicitation or advertisement. The contents of this publication should not be relied upon as a substitute for specific legal advice. Readers are advised to seek professional advice before acting upon any information contained herein.