Page 20 - Banking Finance February 2026

ROUNDUP

may be cancelled. The first revenue vised framework applies to individuals firms and startups, while retaining ac-
assessment will be undertaken from holding a Director Identification Num- countability through timely reporting
April 2029. ber as on March 31 of the relevant fi- of any changes in director information.
nancial year.
Centre relaxes KYC norms The ministry said the changes are Government rolls out Rs.
for company directors to based on recommendations of the 7,295 crore package to
High-Level Committee on Non-Finan-
ease compliance cial Regulatory Reforms and stake- boost MSME export fi-
The central government has relaxed holder consultations with concerned nancing
know-your-customer requirements for departments. The move is intended to The central government has launched
directors of private companies, reduc- adopt a more risk-based regulatory
two targeted schemes involving inter-
ing the compliance burden as part of approach without diluting safeguards est subvention and collateral support,
broader efforts to improve ease of related to anti-money laundering and with a combined allocation of Rs. 7,295
doing business. Under the revised rules counter-terrorist financing. crore over six years from FY26 to FY31,
notified by the Ministry of Corporate Legal and compliance experts said the to improve access to trade finance for
Affairs, directors will now be required revision brings regulatory require- micro, small and medium enterprises
to complete KYC filings once every ments in line with stable risk profiles, (MSMEs), particularly exporters. The
three years instead of annually.
particularly for directors whose details measures form part of the Rs. 25,060
However, directors must still update remain unchanged over long periods. crore export promotion mission ap-
changes in personal details such as The relaxation is also expected to re- proved by the Union Cabinet in Novem-
address, email or phone number within duce procedural delays and compliance ber.
30 days of any modification. The re- costs for companies, especially smaller
The key initiative, titled Interest Sub-
vention for Pre- and Post-Shipment
Rupee Export Credit, aims to provide
India's GDP growth seen at 7.4% in FY26: NSO ad- MSME exporters access to credit at
rates below prevailing market levels.
vance estimates The scheme has a tentative outlay of
India's economy is projected to grow by 7.4 per cent in FY26, up from an Rs. 5,181 crore over six years, with the
estimated 6.5 per cent in FY25, according to the first advance estimates of government initially clearing arrears of
gross domestic product released by the National Statistics Office (NSO). The Rs. 830 crore. A base interest subven-
estimates point to continued resilience in economic activity despite ongo- tion of 2.75 per cent has been pro-
ing external challenges. vided, along with a provision for addi-
The growth outlook has been supported by a sharply lower GDP deflator, tional incentives for exports to notified
estimated at a five-decade low of 0.5 per cent. As a result, nominal GDP under-represented or emerging mar-
growth for FY26 is projected at 8 per cent, the slowest pace since the Covid- kets, subject to operational readiness.
impacted FY21. The gap between nominal and real GDP growth has nar- Government officials said the scheme
rowed to 60 basis points, the smallest since 2011-12. replaces the earlier Interest
The estimated real GDP growth of 7.4 per cent is marginally higher than Equalisation Scheme, which was dis-
the Reserve Bank of India's revised projection of 7.3 per cent. The outlook continued at the end of December
assumes a moderation in growth in the second half of FY26 to 6.9 per cent 2024. Unlike the previous framework,
from 8 per cent in the first half, largely due to a high base effect and a likely the revamped programme will focus
slowdown in central government expenditure. primarily on small and first-time ex-
porters, with caps on annual benefits.
The advance estimates incorporate industrial production data up to Novem-
The objective is to ease working capi-
ber and select leading indicators for December. The figures remain provi- tal constraints amid global trade
sional and will be revised once the new 2022-23 base year is implemented headwinds rather than extend support
and fuller data becomes available.
across all exporter categories. T

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