Banking Regulation & Global Payments
Weekly Roundup
Weekly Brief — Banking Regulation & Global Payments
RBI Targets Digital Bank Run Risk; Budget Slashes Foreign Corporate Tax
This report covers Banking regulation and cross-border finance, from July 19, 2024 to July 26, 2024. Significant findings include the RBI's proposed 5% liquidity buffer for digital deposits and a landmark reduction in corporate tax for foreign companies via the Union Budget.
Key Statistics
| 5% | 35% | 12.5% |
|---|---|---|
| Proposed LCR run-off factor add-on for digital deposits | Reduced base corporate tax for foreign companies | New Long-Term Capital Gains (LTCG) tax rate |
Weekly Executive Summary
- Liquidity Buffers for Digital Banking: RBI proposed an additional 5% run-off factor on retail deposits enabled with internet/mobile banking to mitigate "flash-loan" or rapid withdrawal risks.
- Foreign Capital Incentives: The Union Budget 2024 reduced the corporate tax rate for non-resident entities from 40% to 35% and abolished the "Angel Tax" to boost global investment.
- Tightened Remittance Compliance: Authorized Dealers must now obtain Form A2 for all outward remittances regardless of value, ending the previous exemption for transactions under USD 25,000.
Deep Dive: …
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