The Delhi High Court has directed the Reserve Bank of India (RBI) to file a comprehensive response regarding allegations of data protection rights violations by non-banking financial companies (NBFCs) operating digital lending applications. The directive comes as part of ongoing judicial scrutiny of India's rapidly expanding digital lending ecosystem.

Court Proceedings and Regulatory Framework

A division bench comprising Chief Justice DK Upadhyaya and Justice Tejas Karia heard the petition and examined the current regulatory framework governing digital lending operations. The court's attention was drawn to the RBI's recently issued statutory guidelines, the RBI Digital Lending Directions, 2025, which apply to digital lending activities undertaken by both private and public sector banks.

The bench made specific observations about the nature and scope of these guidelines:

RBI's Compliance and Enforcement Mandate

The court has issued specific directions to the central bank regarding its response and disclosure requirements. "We require the RBI to file a counter affidavit, not only in relation to this writ petition, but also bringing on record the action taken for enforcement of the 2025 guidelines," the bench stated during the proceedings.

The court's directive encompasses two critical areas of disclosure:

• Action taken for enforcement of the Digital Lending Directions, 2025
• Specific measures against entities found violating digital lending guidelines

Timeline and Broader Implications

The Reserve Bank of India has been granted six weeks to file its counter affidavit with the court. This timeline allows the central bank to compile comprehensive information about its enforcement actions and regulatory measures in the digital lending space.

The petition raises significant concerns about data privacy and regulatory oversight in India's digital lending sector. The court's intervention reflects growing judicial attention to the balance between financial innovation and consumer protection in the digital lending ecosystem. The case highlights the importance of robust regulatory frameworks and effective enforcement mechanisms to protect borrowers' data rights while enabling the growth of digital financial services.

Bank of India Mutual Fund has announced the launch of the Bank of India Banking & Financial Services Fund, an open-ended equity scheme designed to capitalize on opportunities within India's banking and financial services sector. The fund represents a sector-focused investment strategy targeting companies across the entire financial ecosystem.

Fund Structure and Investment Strategy

The scheme aims to generate long-term capital appreciation by investing in equity and equity-related instruments of businesses engaged in banking, non-banking financial services, insurance, fintech and capital market activities. The fund will follow a sector-focused strategy and is benchmarked against the Nifty Financial Services TRI.

According to the fund house, the investment approach will combine top-down and bottom-up stock selection across market capitalizations. The scheme plans to invest across established banks, NBFCs, emerging fintech firms, and insurance and capital market companies.

NFO Details and Investment Terms

The new fund offer will open on January 8 and close on January 22, 2026, providing investors with a two-week window to participate in the initial offering.

The scheme will levy an exit load of 1% on redemptions or switches made within 60 days from the date of allotment. No exit load will apply beyond that period, encouraging long-term investment behavior.

Sector Outlook and Performance Context

The launch comes at a time when the banking and financial services sector continues to play a central role in India's economic activity, supported by credit growth, digitization, financial inclusion and the formalization of economic transactions. Over the past two decades, the Nifty Financial Services TRI Index has significantly outperformed broader market indices, reflecting the sector's long-term growth trend.

Fund House Profile

Bank of India Investment Managers Private Limited, the asset management arm of Bank of India, serves as the investment manager for Bank of India Mutual Fund. The fund house has established a significant presence in the mutual fund industry with diversified offerings across multiple categories.

The fund is positioned for investors seeking long-term exposure to the banking and financial services sector, subject to market risks associated with sector-specific investing.