Prepaid Payment Instruments: How has regulation impacted market outcomes?

by Amol Kulkarni and Renuka Sane.

Regulatory interventions often function as de-facto industrial policy, by favouring certain business models over others, effectively picking winners and losers. In this article we present an episode in recent Indian history where regulatory decisions of the Reserve Bank of India on prepaid payment instruments (PPI) significantly influenced competition and product evolution. PPIs are instruments that facilitate the purchase of goods and services, financial services, remittance facilities, etc., against the value stored therein (RBI, 2021). They saw a phenomenal growth of more than 100 times in volumes and more than 25 times in value between September 2012 and November 2024 when volumes had reached 584.78 million and the value Rs. 192.14 billion (RBI, PSI). By this time, the Unified Payments Interface (UPI) volumes and value were more than 25 times and 100 times that of PPI volumes and value. The data suggests that something happened between October 2016 and September 2018, which put the brakes on the PPI growth story and shifted the momentum towards UPI.

UPI enables transfer of funds directly between bank accounts, and does not require parking of funds in non-interest bearing accounts like PPIs. Some may argue that UPI was a superior product that led to reduced interest in PPIs. However, for others, the need to park and transact with only a limited amount in a PPI, ring fences them from larger amounts in a bank account reducing their total risk exposure. Nonbank transaction accounts can also improve access to digital payments for unbanked households (Toh, 2023). The argument that UPI winning over PPIs because the former is a better product would have more credibility if, during the specified period (Ocotber 2016 - September 2018):

• There were no regulatory interventions that adversely affected PPI operations,
• Regulations did not favour UPI,
• Exits of private players from the PPI space were dispersed as more players realised the futility of competing with UPI.

The article argues that this was not the case, and there is reason to believe that the policy and regulatory environment during this period contributed to the slowdown in the PPI growth trajectory, particularly those of non-bank PPIs, and favoured UPI.

The build-up of the PPI market

On 8 November 2016, the Government of India withdrew the legal tender status of Rs. 500 and Rs. 1000 denomination of banknotes issued by the RBI till that date (RBI, 2016). Such large-scale demonetisation gave a fillip for the demand of digital payments. Consequently, the volume of PPI transactions shot up from 127 million in October 2016 to 261 million by December 2016 and steadily rose to around 340 million by March 2017. The value of PPI transactions also surpassed Rs. 100 billion during this period (RBI, PSI). In the months following demonetisation, around 10 entities, all non-banks, received permission from the RBI to issue and operate PPIs (RBI, 2025). The number of non-bank PPI issuers increased from 37 to 55, and surpassed bank PPI issuers for the first (and only) time in this period (RBI, AR).

The draft PPI Master Directions: March 2017

A few months after demonetisation, on 20 March 2017, the RBI issued draft Master Directions on Issuance and Operations of PPIs in India for public comments (RBI, 2017). One of the stated objectives of the draft Master Directions was to encourage innovation in the segment in a prudent manner, taking into account safety and security along with customer protection and convenience.

By this time, three types of PPIs were regulated: semi closed PPIs with minimum KYC, semi closed PPIs with full KYC, and open PPIs. The key difference between semi-closed and open PPIs was that the former could be used to purchase goods and services at specific or clearly identified merchant locations, while the latter could be used for purchase of goods and services at any card accepting merchant location. Cash withdrawal was not permitted through semi-closed PPIs but allowed through open PPIs.

The draft Master Directions proposed two important changes:

1. Increase in the capital and networth requirements: Before the draft, PPI operators were required to maintain a minimum positive net worth of Rs. 1 crore at all times, along with a minimum paid up capital of Rs. 5 crores (RBI, 2016).
2. Limits on monthly fund transfers: Earlier there were no limits on monthly fund transfers. The 2017 draft directions proposed restrictions on the minimum amount outstanding at any point of time, the maximum amount that could be loaded on to a wallet in a month, and the amount that could be transfered out in a month.

Some key proposals of the 2017 draft directions were:

All figures in Indian Rupees

Issue	Semi closed PPIs with minimum KYC	Semi closed PPIs with full KYC	Open system PPIs
Minimum positive net worth to be maintained at all times	25 crores	25 crores	25 crores
Amount outstanding at any point of time	20,000	1,00,000	1,00,000
Maximum amount that can be loaded during any month	20,000	Cash loading limit: 50,000	Cash loading limit: 50,000
Monthly fund transfer limit	10,000	For pre registered beneficiary: 1,00,000 For other cases: 10,000	For pre registered beneficiary: 1,00,000 For other cases: 10,000

There was pushback from stakeholders on the proposals of the draft Master Directions (IGIDR, 2017; CUTS, 2017; IFMR, 2017; NASSCOM-DSCI, 2017). For instance, the Finance Research Group (FRG) at IGIDR called out disproportionate proposals around capital requirements, and transaction limits on consumers, and suggested rolling them back. Specifically, with respect to transaction limits, the FRG pointed out:

The intention for imposing transaction limits and restricting consumers from transacting with their own money is unclear. Every payment system in an economy is susceptible to fraud. However, we do not impose limits on the use of payment systems to pre-empt frauds. For example, the susceptibility of credit card transactions to frauds does not lead us to impose limits on individual credit card transactions. On the contrary, imposing transaction limits on consumers is contrary to their interests.

The final PPI master directions: October 2017

In October 2017, the RBI issued Master Direction on Issuance and Operation of PPIs, after examining comments and feedback received on draft directions (RBI, 2017A). Some key provisions of the Master Directions were:

All figures in Indian Rupees

Issue	Semi-closed PPIs with minimum KYC	Semi closed PPIs with full KYC	Open system PPIs
Minimum positive net worth at the time of application	5 crores	5 crores	5 crores
Minimum positive net worth by the end of third financial year of receiving final authorisation	15 crores	15 crores	15 crores
Amount outstanding at any point of time	10,000	1,00,000	1,00,000
Maximum amount that could be loaded during any month	10,000	Cash loading limit: 50,000	Cash loading limit: 50,000
Cap on amount that could be loaded during a financial year	1,00,000
Monthly fund transfer limit	10,000	For preregistered beneficiary: 1,00,000 For other cases: 10,000	For preregistered beneficiary: 1,00,000 For other cases: 10,000

The Master Directions had reduced networth requirements from Rs 25 crore proposed in the draft to Rs 15 crore. However, additional restrictions were imposed on transaction limits. For instance, the maximum amount which could be loaded during any month in a semi closed PPI with minimum KYC was reduced from Rs. 20,000 to Rs. 10,000. In addition, a new limit on maximum amount that could be loaded in a semi-closed PPI with minimum KYC during a financial year of Rs. 1,00,000 was included in the final directions. It is important to note that this had not found mention in the original draft proposal that was circulated for comments.

This effectively meant that the average amount that could be loaded in a semi-closed PPI with minimum KYC on a monthly basis was Rs. 8,333. Alternatively, for 10 months during a financial year, Rs. 10,000 could be loaded in a semi-closed PPI with minimum KYC every month, but for the next two months, no amount could be loaded, to comply with the annual limits. Coversations with stakeholders suggest that such restrictions potentially frustrated recurring payments and auto-debit mandates which rely on minimum balance being available in a wallet. Further, it restricted the use case of PPIs to very narrow set of transactions.

The impact of regulatory changes: the size of transactions

The proposals in both the draft and final Master Directions had an immediate and severe impact on the PPI market. Figure 1 shows the impact on the PPI transaction volumes, and the turning point when UPI overtook PPIs.

Figure 1: PPI and UPI transaction volumes

Figure 2 shows the impact of Master Directions on the PPI transaction values, and the turning point when UPI overtook PPIs - immediately after these Directions.

Figure 2: PPI and UPI transaction values

However, one must also note that PPI transactions were more than UPI's, for about a year since its launch in May 2016 till about October 2017, when the final master directions on PPIs came into effect. UPI got a fillip due to demonetisation but was still used less than PPIs for several subsequent months. This suggests that PPIs were relevant in a market with UPI.

The impact of regulatory changes: the number and type of players

Figure 3 presents the changes in the number of players in the PPI market. Between March and October 2017, i.e. between the draft and final PPI directions, licenses of seven PPI operators, all of which were non-banks, were cancelled. Of these, four voluntarily surrendered their license, perhaps owing to the restrictive regulatory framework proposed in the draft Master Directions (RBI, 2025). This shows the impact that the draft directions, which also reflected regulator's thinking, had on the the PPI market. Once the directions were finalised, licenses of 20 PPI operators were cancelled by the RBI, all of which were non-banks. Overall, we see that in this period, 16 players voluntarily surrendered their licenses, four ceased operations, five converted themselves to payments banks, and one license was revoked. Further for three years from 2018 to 2020, not a single permission was granted to non-banks for the issuance and operation of PPI (RBI, 2025). Given that licenses were being voluntarily surrendered, one may assume that very few or no fresh applications were received by the RBI. This was also the period during which the government began massively incentivising use of UPI through cashbacks and other schemes (Kulkarni, 2018).

The number of licenses issued went up only in 2021, potentially as a response to the creation of a new category of semi-closed PPI with minimum KYC which could be loaded only through bank accounts.

Figure 3: Non-Bank Licenses issued and cancelled

The regulations led to a shift in the composition of players as well. Earlier, the market saw both bank and non-bank entities offer PPI products. The commercial consequences of the regulatory changes were much larger on non-bank PPIs relative to bank PPIs. Consequently, the number of non-bank PPI operators reduced from 55 in 2016-17 to 36 in 2020-21, while the number of bank PPI operators increased from 54 to 56. In fact, it went upto 62 in 2019-20, possibily indicating the interests that banks retained in offering PPIs, which ideally should have not been the case, if UPI was a superior product. Of the non-bank PPI operators which continue to operate in spite of the regulatory changes in 2017, many are legacy operators enjoying a loyal user base, some are part of larger groups having deep pockets and providing financial or digital services, others have expanded into offerings like digital lending, some offer niche services like foreign exchange, money transfer, and transit payments, while few had to undergo change in management and control.

Figure 4: Bank and non-bank players

Further, non-bank issuers have faced more stringent compliance burdens, particularly around KYC norms, fund loading restrictions, and interoperability requirements. For instance, while non-bank PPIs must maintain an escrow account with a partner bank, bank operated PPIs can leverage their own deposit accounts, reducing costs and operational friction. Additionally, regulatory decisions such as restricting credit lines on PPI wallets have disproportionately impacted non-bank issuers, limiting their ability to innovate and compete with banks that can seamlessly integrate PPI-like functionalities within their broader suite of financial services.

RBI's review of its stringent conditions (late 2019-early 2020)

More than two years after the October 2017 Master Directions, the RBI decided to review some of the stringent conditions imposed on the PPI market, particularly those related to loading of PPIs. In December 2019, it decided to create a new category of semi-closed PPI with minimum KYC which could be loaded only through bank accounts. For such PPIs, the amount which could have been loaded through bank accounts during a financial year was increased to Rs. 1,20,000 i.e. Rs. 10,000 per month could be loaded in such PPIs. The RBI recognised that such leeway was necessary to ensure regular bill and merchant payments (RBI, 2019A). For other semi-closed PPIs with minimum KYC, the annual limit of Rs. 1,00,000 for loading was retained. However, this move appeared to be too little too late and perhaps failed to uplift the momentum in PPIs. Consequently, in January 2020, in addition to bank accounts, credit cards were permitted as a mechanism of loading semi-closed PPIs with minimum KYC having an annual loading limit of Rs. 1,20,000. This move, so far, has also failed to push PPI towards previously experienced growth rates.

Conclusion

The analysis of RBI regulation of PPIs over the past decade, changes in PPI volumes, value, and operators during this period, suggests that regulation has indeed impacted market outcomes for PPIs. While the RBI provided some relaxations, these were not enough to push PPIs back into high growth trajectory.

While it is difficult to pinpoint the exact regulatory requirement which might have impacted the PPI market most, it is clear that the restrictions introduced in October 2017 collectively contributed to a significant decline amongst industry's interest in PPIs as payment instruments. This was validated through interactions with key stakeholders as well.

One reckons that the RBI would have introduced such restrictions in the interests of safety and security of the payments market, prevent fraudulent actors from misusing the instrument, and obstruct unreliable entities from issuing and operating PPI instruments. It might not have predicted that the restrictions could have had such adverse consequences of reducing the attractiveness of PPIs as an instrument, and the users and market players, moving away from the PPI market. It is here where robust public consultations, and ex-ante cost benefits analyses can prove useful to estimate the potential impact of regulatory instruments, avoid disproportionate regulation, and ensure balanced market outcomes. While the RBI did invite suggestions on draft directions in March 2017, several new requirements, such as the annual cap on loading semi-closed PPIs with minimum KYC, were directly incorporated in the final directions of October 2017. This prevented stakeholders from providing their inputs on such new requirements.

The RBI should use tools like public consultations more often and thorougly. In any case, frauds and transaction failures are equally possible with UPI, as recent events have shown. In fact, with UPI, the entire bank balance of the customer is at risk, making them more susceptible than PPIs could ever have been.

Some may argue that with the advent of UPI, PPI was bound to lose market share. However, as this article shows, PPI was restricted by regulations, and did not get an opportunity to effectively compete with UPI, which on the other hand was booming on the back of regulatory relaxations, incentives, and zero fee mandates. One must also not forget that it was the non-banks which propelled UPI to unimaginable heights, and non-banks were also behind PPIs initial growth before the regulations hit them badly.

References

CUTS, 2017: Comments on draft Master Directions on issuance and operations of PPIs in India, 2017, https://cuts-ccier.org/pdf/Advocacy-Comments_on_RBI_Master_Direction_on_Issuance_and_Operation_of_PPIs.pdf

IFMR, 2017: Comments on draft Master Directions on issuance and operations of PPIs in India, 2017, https://dvararesearch.com/wp-content/uploads/2024/01/IFMR-Finance-Foundation-Comments-on-the-RBI-Draft-Master-Directions-on-Issuance-and-Operation-of-Prepaid-Payment-Instruments-in-India.pdf

IGIDR, 2017: Finance Research Group, Inputs on draft Master Directions on issuance and operations of PPIs in India, IGIDR, 16 April 2017, https://ifrogs.org/PDF/201703note_inputsToCpOnPpis.pdf

Kulkarni, 2018: Amol Kulkarni, (Not) the way to promote digital payments, CUTS Discussion Paper, February 2018, https://cuts-ccier.org/pdf/DP_the_way_to_promote_digital_payments.pdf

Mukherjee, 2025: Mukherjee, India: UPI enabled for prepaid payment via third-party apps, Coingeek, 7 January 2025, at https://coingeek.com/india-upi-enabled-for-prepaid-payment-via-third-party-apps/

NASSCOM-DSCI, 2017: Inputs on draft Master Directions on issuance and operations of PPIs in India, 2017, https://www.dsci.in/resource/content/nasscom-dsci-submission-rbi-master-directions-ppis

RBI, 2008: RBI Press Release regarding Inviting Comments on Approach Paper on Guidelines for PPIs dated 7 November 2008, at https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=19419

RBI, 2016: RBI Master Circular dated 1 July 2016 regarding Policy Guidelines on Issuance and Operation of PPIs in India, at https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=10510

RBI, 2016A: RBI Press Release dated 8 November 2016 regarding Withdrawal of Legal Tender Status of Rs 500 and Rs 1000 Notes, at https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=38520

RBI, 2017: RBI Draft Master Directions dated 20 March 2017 regarding Issuance and Operations of PPIs in India, at https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=3325

RBI, 2017A: RBI Master Direction dated 11 October 2017 (updated as of 17 November 2020) regarding Issuance and Operation of PPIs at https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=11142

RBI, 2019: RBI Notification regarding Introduction of a New Type of semi-closed PPIs dated 24 December 2019, at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11766&Mode=0

RBI, 2019A: RBI Press Release regarding Statement on Development and Regulatory Policies dated 6 December 2019, at https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=48803

RBI, 2021: RBI Master Directions on PPIs dated 27 August 2021 (updated as on 27 December 2024), at https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12156

RBI, 2024: RBI Notification dated 27 December 2024 regarding UPI access for PPIs through third-party applications, at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12756&Mode=0

RBI, 2024A: RBI Press Release dated 5 April 2024 regarding Statement on Developmental and Regulatory Policies, at https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=57639

RBI, 2025: RBI, Approvals/ Certificates of Authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 for Setting up and Operating Payment System in India, 9 January 2025, at https://rbi.org.in/Scripts/PublicationsView.aspx?id=12043

RBI, AR: RBI Annual Reports at https://rbi.org.in/Scripts/AnnualReportMainDisplay.aspx. There was a change in financial year from June to March from 2019-20. Also, data of bank PPI issuers for 2015-16 is not available.

RBI, PSI: RBI Payment System Indicators (monthly) at https://www.rbi.org.in/Scripts/PSIUserView.aspx

Toh, 2023: Ying Lei Toh, How Much Do Nonbank Transaction Accounts Improve Access to Digital Payments for Unbanked Households?, Payment System Research Briefing, 29 November 2023, Federal Reserve Bank of Kansas City, at https://www.kansascityfed.org/Root/documents/9919/PaymentsSystemResearchBriefing23Toh1129.pdf

The authors are researchers at the TrustBridge Rule of Law Foundation.

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Improving legal transparency at the RBI

by Amol Kulkarni and Renuka Sane.

A core function of several Indian regulators is adjudication, which involves investigating potential violations, determining culpability, and imposing appropriate sanctions. In India, most financial sector regulators, including the Securities and Exchange Board of India (SEBI), and the Insurance Regulatory and Development Authority of India (IRDAI), issue reasoned orders outlining the investigation, findings, and the rationale behind the imposed sanctions (SEBI, ADJ; IRDAI, ENF). These orders are not only accessible to the concerned parties but are also made available in the public domain, promoting transparency and accountability. The availability of orders in the public domain has led to important research on the quality of the adjudicatory function at regulators and spawned a debate on how to improve it (Sane et al, 2021, 2022; Aggarwal et al, 2024, 2024A).

The Reserve Bank of India (RBI) is a notable exception (RBI, REG). While it is empowered to impose diverse sanctions on its regulated entities including penalties, suspension and cancellation of licenses, imposition of business restrictions, and supersession of the board, it does not release its orders in the public domain. The RBI discloses only the sanctions and their revocation on regulated entities through press releases (PRs) on its website. This is unlike banking regulators in other jurisdictions who either have to put out their orders in the public domain or argue their side in administrative courts which publish their orders on their websites (FCO, ADJ). The RBI is unique in having the full powers of adjudication without the requirement of transparency in its adjudicatory process or an appropriate appellate review mechanism (RBI, APL). Neither the orders of the RBI nor of its [internal] appellate authorities are available in the public domain. If and when a matter reaches a high court or the Supreme Court, orders of such authorities become available for public reading.

This opacity surrounding the RBI's adjudication process motivates our research. The extensive use of PRs to impose sanctions and a single PR to sanction more than one entity raises questions about clarity in disclosures regarding violations by regulated entities and the consistency of information related to sanctions. While it is a rule of law principle that orders should be put out in the public domain, to ensure know-ability of the law and foster consistency in decision making, we focus on improving at least the content of its PRs. It is easy to think of RBI's PRs as a mere corporate communication function, however, what RBI chooses to disclose by way of PRs is reflective of its broader approach to legal transparency.

In this article, we delve into the information disclosed in the RBI's PRs concerning enforcement actions against regulated entities. Furthermore, we investigate how central banks in different jurisdictions communicate sanctions and the level of detail they provide in their public disclosures. This comparative analysis allows us to benchmark the RBI's practices against international standards and identify best practices that could enhance transparency and accountability. Our analysis can form the basis for improving the RBI's disclosure framework. By adopting a more transparent approach to disclosing enforcement actions, the RBI can foster greater understanding and confidence in its regulatory processes.

Methods

We examine two cases between May 2024 and January 2025 wherein the RBI imposed and revoked sanctions on its regulated entities through PRs. Both cases included more than one entity. We evaluate if the regulator:

1. Was consistent in disclosing violations by entities.
2. Provided the rationale for imposing sanctions.
3. Described the remedial measures taken by the regulated entities which necessitated revoking the sanctions.

We then review practices by other central banks on disclosures of sanctions and offer suggestions for improvement to the RBI.

Brief introduction to the two cases

We examined the imposition and revocation of sanctions on four NBFCs (Case 1) and two asset reconstruction companies (ARCs) (Case 2).

Case 1:

RBI's PR dated 17 October 2024 (October PR) sanctioned four unrelated NBFCs to cease and desist from sanction and disbursal of loans (RBI PR, 2024A).

Within a few months of imposition, the RBI issued more PRs between December 2024 and January 2025 announcing the lifting of business restrictions on all four NBFCs (Dec-Jan PRs).

The Dec-Jan PRs provided a common reason for lifting the restrictions on four NBFCs (RBI PR, 2025):

...Now, having satisfied itself based on company's submissions, and in view of adoption of revamped processes, systems, and the company's commitment to ensure adherence to the Regulatory Guidelines on an ongoing basis, especially for ensuring fairness in the loan pricing, the Reserve Bank has decided to lift the afore-mentioned restrictions placed on... with immediate effect.

Case 2:

The press release dated 29 May 2024 (May PR) sanctioned two entities belonging to the Edelweiss group: ECL Finance Limited (ECL) and Edelweiss Asset Reconstruction Company Limited (EARCL). ECL was prohibited from undertaking any structured transactions in respect of its wholesale exposures. EARCL was directed to cease and desist from acquisition of financial assets (RBI, PR 2024).

These sanctions were lifted through a PR dated 17 December 2024 (December PR). Similar language as used in Case 1 was used (RBI PR, 2024B):

...Now, having satisfied itself based on submissions and remedial measures put in place by these companies to address the concerns of RBI and their commitment to ensure adherence to the Regulatory Guidelines at all times and on an ongoing basis, the Reserve Bank has decided to lift the afore-mentioned restrictions placed on...with immediate effect.

Comparing the disclosures

We now compare the disclosures relating to the imposition and revocation of sanctions by the RBI in the two cases. The objective is to identify any consistent trends and point out inconsistent disclosure practices.

Imposition of sanctions

In Case 1, wherein four unrelated NBFCs were sanctioned through a single PR and for similar violations, it is difficult to identify specific non-compliances by each of the sanctioned NBFCs. It is also not clear if all the NBFCs were equally violating all the norms mentioned in the October PR, or to different degrees. Concerns have been raised regarding the proportionality of RBI actions, particularly since some NBFCs were in the business for several years, while others were relatively new. Thus, one wonders if it was desirable to subject all NBFCs to the same sanction, and the possible unintended consequences of such business restrictions on entities doing business with, including customers of, such NBFCs (Sane, 2024).

Similar to Case 1, sanctions were imposed on more than one entity in Case 2. However, a key difference is that the four NBFCs sanctioned in Case 1 were unrelated to each other while the two entities sanctioned in Case 2 were Edelweiss group companies (EGCs).

While the violations by two EGCs in a consolidated manner, the May PR also highlighted the violations at an individual level. While PRs in both cases lack critical details about the violations, the regulator's inconsistent approach to the extent to which it intends to disclose violations by regulated entities is evident from the review and comparison of these PRs.

Rationale for imposition of sanctions

On the rationale for the imposition of sanctions, the October PR related to Case 1 does not provide any information other than the violations. The May PR related to Case 2 highlights efforts made by the RBI to engage with relevant entities to rectify the deficiencies and take meaningful remedial action, which remained unsatisfactory. While limited, such additional information helps in better understanding the rationale for business restrictions imposed by the regulator, the efforts it took to work with regulated entities to come up with a solution, and whether any alternatives were considered. No such information is present in the October PR related to Case 1, highlighting another component of inconsistencies between disclosures by the RBI relating to violations committed by regulated entities and sanctions imposed by it.

The disclosures imposing and revoking sanctions on regulated entities do not seem to be consistent. While the former typically lays down key violations and broad remedial measures which the RBI will take into account for reviewing the violations, the latter seems to be devoid of any specific details regarding remedial measures taken by the sanctioned entities resulting in the lifting of business restrictions.

Such lack of information is particularly concerning when the time between imposition and lifting of sanctions is quite short, and when the regulator has itself highlighted the uncooperative nature of regulated entities and their tendency to resort to new ways to circumvent regulations, like in Case 2. For instance, for Navi NBFC in Case 1, the sanctions were lifted in less than one and a half months of imposition. What is unclear are the actions or course corrections the NBFCs took to get such a respite within a short duration of the imposition of restrictions.

Moreover, while imposing sanctions the RBI often highlights areas wherein remedial action is expected from the sanctioned entities. Such areas seem to have been ignored while revoking sanctions. For instance, in Case 1, the RBI specified that remedial actions were expected in pricing policies, risk management processes, customer service and grievance redress aspects. However, the Dec-Jan PRs specifically highlighted that NBFCs had taken actions to ensure fairness in loan pricing. No reference was made to other areas repeatedly identified by the regulator while imposing sanctions. In case 2, even this information, about the key area related to which remedial action was taken by the sanctioned EGCs, was missing.

Despite being inconsistent in disclosing relevant information while imposing sanctions, and in disclosures during imposing and revoking sanctions, the RBI is quite consistent when disclosing the rationale (or the lack thereof) of revoking sanctions, even when the violations differ.

The language of December PR lifting business restrictions in Case 2 is significantly similar to the language of Dec-Jan PRs lifting business restrictions in Case 1. The regulator ighlighted that it is satisfied by the remedial measures taken by the sanctioned entities. There is no information about the nature of remedial measures, whether they were taken in areas wherein deficiencies were identified, and mechanisms through which RBI satisfied itself, among other things.

The following table summarily compares the disclosures in both cases and shows the inconsistency in the PRs.

S. No	Indicator	Case 1	Case 2
1	Identification of sanctioned entities	Yes	Yes
2	Common non-compliances by all entities	Yes	Yes
3	Specific violations by each violator	No	Yes
4	Common sanctions on all entities	Yes	No
5	Specific sanctions on each entity	No	Yes
6	Additional rationale for sanctions	No	Yes
7	Conditions for review of sanctions	Yes	Yes
8	Specific remedial measures expected from sanctioned entities	Yes	Yes
9	Broad rationale for the lifting of sanctions	Yes	Yes
10	Specific remedial measures taken by sanctioned entities	Yes	No
11	Consistency between remedial action expected and taken	No	No

Transparency by other central banks

The Federal Reserve (Fed), the central bank of the United States, takes enforcement actions against its regulated entities. Like RBI, the Fed issues PRs announcing enforcement actions and their terminations (FED PR). In addition, the Fed releases consent orders on its website (FED PR, 2024). Interestingly, unlike the RBI, one Fed PR covers more than one entity only when such entities are related parties (FED PR, 2025).

On its website, the Fed arranges disclosures related to sanctions in a reader-friendly manner. The sanctions are listed under heads like effective date, termination date, the party subject to action (banking organisation or individual), and enforcement action, along with a link to the PR (FED ENF):

Figure 1: Sanctions imposed by Federal Reserve

The Fed disclosures typically fix responsibility on the board of directors of the regulated entities to comply with the sanctions, and to take corrective actions (FED AGR, 2023):

Bancorp's board of directors shall take appropriate steps to fully utilise Bancorp's financial and managerial resources including, but not limited to, taking steps to ensure that the Bank complies with this Agreement...

Each of the corrective actions is then listed out, along with the period within which such action needs to be completed:

Within 60 days of the effective date of this Agreement, the board of directors of the Bank shall submit a written plan to the Supervisors to strengthen board oversight of the management and operations of the Bank. The plan shall include the following four items...

The disclosure then discusses the sanction:

Effective immediately, Bancorp shall not, directly or indirectly, declare or pay dividends, engage in share repurchases, or make any other capital distribution in respect of common shares,... without the prior written approval of the Reserve Bank and the Director of Supervision and Regulation of the Board of Governors...

A separate disclosure terminating the sanction is issued by the Fed (FED PR 2025A).

Like the Fed and the RBI, the European Central Bank (ECB) is the central bank of the European Union countries which have adopted the euro. It has been empowered to impose sanctions on its regulated entities, in case of non-compliance. It also issues PRs disclosing sanctions it imposed, similar to other regulators. Along with the PRs, the ECB issues a publication with some additional details regarding the violation and rationale for the sanction.

Similar to the Fed but unlike the RBI, the ECB neatly discloses its sanctions under headings like date of ECB decision, supervised entity, amount, area of infringement, further information, and decision status, as indicated below (ECB SAN):

Figure 2: Sanctions imposed by European Central bank

Arrangements of sanctions in this reader-friendly manner fosters ease of search and understanding for regulated entities and interested stakeholders.

The ECB PRs identify the non-compliance and its period. For instance, in its PR dated 20 December 2024 related to BNP Paribas, the ECB states (ECB PR, 2024):

Between 2014 and 2021, for 31 consecutive quarters, BNP Paribas Fortis SA/NV understated its risk-weighted assets connected to factoring exposures of its subsidiary in Belgium.

The ECB PRs also fix responsibility and accountability on regulated entities by indicating if the non-compliance was willful or not:

The bank knowingly reported wrongly calculated figures to the competent authorities, thereby preventing them from having a comprehensive view of its risk profile.

The ECB PRs then go on to explain the significance of the non-compliance and adverse consequences of the violation:

As a result of underestimating its risk-weighted assets, BNP Paribas Fortis SA/NV did not calculate its capital requirements properly and reported higher capital ratios than it should have.

The ECB PR also discloses the rationale for the sanction:

When setting a pecuniary penalty, the ECB applies its dedicated public guide (ECB, 2021). In this case, the ECB has classified the breach as 'severe'.

Along with the PR, the ECB issues a publication with some additional details regarding the violation and rationale for sanction, such as (ECB, 2024):

The ECB assessed the impact of the breach as 'medium' based on the effect that the breach had on the prudential situation of the entity and its effective supervision. This was determined on the basis of the importance of reporting obligations for ongoing supervision, the duration of the breach and the extent to which the reported figures differed from those calculated using less sophisticated regulatory approaches, which prevented the ECB from obtaining a comprehensive view of the risk profile and the prudential situation of the entity in the relevant period...

Such disclosures can provide appropriate guidance to the regulated entities in planning their operations. Also, entities doing business with, and customers of, sanctioned entities are likely to find themselves in a better position to determine whether or not to continue engaging with sanctioned entities.

Like the Fed, it also appears that the ECB does not impose multiple sanctions through a single PR unless the sanctioned entities are related parties.

Conclusion

From a review of sanction-related PRs and disclosures by the RBI, the Fed, and the ECB, the RBI may consider the following suggestions to improve its practices:

1. Not to issue a single PR disclosing sanctions on multiple entities, unless those entities are related parties or acting in concert.
2. Identify violations by the sanctioned entities.
3. Disclose corrective actions and the period within which such actions are required to be taken.
4. Highlight the sanctions and rationale for the same. It appears that the RBI has an enforcement policy which lists factors that it needs to consider while imposing sanctions (RBI AR, 2019). The RBI may consider disclosing relevant factors which it took into account while imposing specific sanctions.
5. Highlight the corrective actions taken by the sanctioned entities while revoking sanctions.

In addition, the RBI can get inspiration from the ECB and the Fed to arrange its sanctions-related PRs in a searchable and user-friendly manner. Further, the Parliament needs to require the RBI to not only give "speaking orders", but also put its written orders in the public domain. This becomes essential as the RBI is using PRs for a very weighty function, that of legal transparency. A commensurate serious process design for ensuring that relevant information is consistently disclosed in public domain, is therefore necessary.

References

Aggarwal et al, 2024A: Natasha Aggarwal, Bhavin Patel, and Renuka Sane, 2024, The exercise of discretionary powers: The case of debarment and restraint from capital markets, The Leap Blog.

Aggarwal et al, 2024: Natasha Aggarwal & Bhavin Patel, 2024, Bypassing expert tribunals through writs: Judicial overreach in review of the Telangana State Electricity Regulatory Commission's orders, Working Papers 7, Trustbridge Rule of Law Foundation.

ECB PR, 2024: European Central Bank Press Release, ECB sanctions BNP Paribas Fortis SA/NV for misreporting capital requirements, 20 December 2024.

ECB SAN: European Central Bank, Sanctions imposed by the ECB.

ECB, 2021: European Central Bank, Guide to the method of setting administrative pecuniary penalties pursuant to Article 18(1) and (7) of Council Regulation (EU) No 1024/2013, March 2021.

ECB, 2024: European Central Bank, Imposition of an administrative penalty on BNP Paribas Fortis SA/NV, December 2024.

FCO, ADJ: The decisions of Financial Conduct Authority of UK are appealable at Upper Tribunal (Tax and Chancery Chamber). Decisions of the Upper Tribunal are available here.

FED AGR, 2023: Written Agreement by and among Marblehead Bancorp Marblehead, Ohio Marblehead Bank Marblehead, Ohio Division of Financial Institutions Columbus, and Federal Reserve Bank of Cleveland Cleveland, Ohio, October 2023.

FED ENF: Board of Governors of the Federal Reserve System, Enforcement Actions.

FED PR, 2024: Board of Governors of the Federal Reserve System, Order to Cease and Desist Issued Upon Consent in the matter of First Murphysboro Corp, 25 November 2024.

FED PR, 2025: Board of Governors of the Federal Reserve System Press Release, Federal Reserve Board announces termination of enforcement action with Marblehead Bancorp and Marblehead Bank, 23 January 2025, wherein the former is owner and controller of the latter.

FED PR, 2025A: Federal Reserve Board announces termination of enforcement action with Marblehead Bancorp and Marblehead Bank, 23 January 2025.

FED PR: Board of Governors of the Federal Reserve System, Press Releases.

IRDAI, ENF: IRDAI enforcement actions are available here.

RBI AR, 2o19: RBI Annual Report 2018-19, RBI Enforcement Policy and Framework is available in Box VI.6 here.

RBI PR, 2024: RBI Press Release, Supervisory Action against ECL Finance Limited and Edelweiss Asset Reconstruction Company Limited based on material supervisory concerns, 29 May 2024.

RBI PR, 2024A: RBI Press Release. Action against select NBFCs including NBFCs-MFIs, 17 October 2024, The sanctioned entities were Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited, and Navi Finserv Limited.

RBI PR, 2024B: RBI Press Release, Removal of supervisory restrictions: ECL Finance Limited and Edelweiss Asset Reconstruction Company Limited, 17 December 2024.

RBI PR, 2025: RBI Press Release, Removal of supervisory restrictions: (i) Asirvad Micro Finance Limited, Chennai and (ii) DMI Finance Private Limited, New Delhi, 8 January 2025.

RBI, APL: Appeals against different RBI enforcement actions are maintainable before Appellate Authorities mentioned in the relevant regulatory instruments. For instance, as per the RBI Master Circular on Scheme of Penalties, appeal against penalties imposed by RBI is maintainable with the Regional Director/Chief General Manager/Officer-in-Charge of the Regional Office concerned. See here. Similarly, under the PSS Act, the Officer-in-Charge of Department of Payment and Settlement Systems at the Central Office of the Reserve Bank of India is the Appellate Authority. See here. Orders of such appellate authorities are not available in public domain.

RBI, REG: The RBI regulates different entities, including banks, non-bank finance companies (NBFCs), payment service providers, asset reconstruction companies, cooperative banks, and housing finance companies. It derives its powers from the Banking Regulation Act, 1949; the RBI Act, 1934; the Payment and Settlement Systems Act, 2007; and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, among others.

Sane et al, 2021: Sane, Renuka and Trishee Goyal, Towards better enforcement by regulatory agencies, 2021.

Sane et al, 2022: Sane, Renuka and Vivek, S., Reconsidering SEBI Disgorgement (May 31, 2022).

Sane, 2024: Sane, Renuka (2024), Order Restricting 4 NBFC operations lacks clarity. It won't help customers, companies, The Print, 23 October 2024.

SEBI, ADJ: SEBI adjudicatory orders are available here.

The authors are researchers at the TrustBridge Rule of Law Foundation.

Author: Bhavin Patel

Bhavin Patel is a Researcher at TrustBridge Rule of Law Foundation, New Delhi.

On this blog:

• Balancing Power and Accountability: An Evaluation of SEBI's Adjudication of Insider Trading, 2 April 2025.
• A guide to writing good regulatory orders, 13 March 2025.
• Judicial overreach: Bypassing expert tribunals in the electricity sector, 9 December 2024.
• The exercise of discretionary powers: The case of debarment and restraint from capital markets, 20 July 2024.
• Concerns about recent developments on SEBI's regulation-making on market rumours and insider trading, 6 May 2024.
• Assessing regulatory capability in Tamil Nadu electricity regulation: Evidence from appeals, 26 April 2024.

Be you ever so high, the markets are always above you

by Ajay Shah.

Purposive state action is fraught with error. Human and social systems are poorly understood and contain nonlinearities, so there is a law of unintended consequences. Grand schemes go wrong. What works well is a humble approach, of crossing the river by feeling the stones, in an environment of expertise. There are two rings of containment of power, that help address a regime which diverges from this approach.

Two rings of check-and-balance

The first ring of containment of power is the checks and balances of the political system. Liberal democracies work by dispersing power, by using ambition to counteract ambition. This curtails mistakes.

In some situations, these things break down. Power becomes concentrated, which induces mistakes. The second ring of containment is the financial markets.

1. When Liz Truss was Prime Minister in the UK, the markets pushed back. The 30-year yield went from 3.6% to 5.1%. The GBP dropped 7.6%. The FTSE fell 7%. Ultimately, this led to her being ousted in 44 days.
   
   
2. When Tony Blair and the labour party won the elections on 2 May 1997, the financial markets expressed skepticism. When a new government is greeted with a higher interest rate, this immediately curtails spending power. This pushed the new government to go through with a group of responsible decisions. On 6 May 1997 (i.e. 4 days after winning), they announced independence for the Bank of England coupled with the creation of an independent Debt Management Office so as to unburden monetary policy from the debt management conflict of interest. On 2 July, in the budget speech, they were cautious in their spending commitments. All these actions were crafted because the second ring of containment impinged upon the political leadership.
   
   
3. Vijay Kelkar has long argued that the stock market crash of 17 May 2004 helped encourage Sonia Gandhi to choose the team of Manmohan Singh, P. Chidambaram and Montek Ahluwalia as the UPA economic policy leadership, which delivered the economic successes of 2004-2011.
   
   
4. James Carville worked for Bill Clinton. A rough analogy into Indian politics would be Amar Singh. He once said: "I used to think that if there was reincarnation, I wanted to come back as the President or the Pope or as a 400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody." This awareness tempered and shaped the early actions of the Clinton presidency, which worked out as a successful period for the American economy. 
   
   
5. It is starting to work out similarly with the Trump Tariffs. The wheels of global general equilibrium started turning on 2 April, with forward looking forecasts embedded in financial market prices. Financial players everywhere asked: How well will the US economy work? Is the US the safe haven, with sound institutions, that we thought it was?
   
   The 10 year US Treasury went up from 3.9% to 4.5%. The 30 year bond briefly went up to 5%. The S&P 500 dropped 12.1%. Safe haven seekers turned to Germany, and yields on government bonds there fell. Larry Summers said on 9 April:  "We are being treated by global financial markets like a problematic emerging market".
   
   In my column in the Business Standard of 3 March, I had said that in the US, the first ring of containment has broken down --
   

   The US is in a constitutional crisis, with a failure of checks and balances, with the inability of the judiciary, the legislature, the electoral system, the agencies, the special counsel and the press to rein in a strongman.

   and that the second ring of containment would have to do its work --
   

   Market discipline will then impinge upon Trump and the MAGA world, and we hope, atleast partly kick them into shape. Be you ever so high, the markets are always above you.

Market discipline is not perfect. In the field of sovereign risk, we know well that the market tolerates a lot of fiscal misbehaviour for a long time, and then abruptly pulls access. Similarly, I have argued that the Indian equity market fares poorly on macro forecasting while it does well on micro-forecasting. The wrath of the market involves caprice. The key point here is that markets do speak truth to power, over and beyond the checks and balances of the political system.

A development perspective

The yearning for raw power is there in many people. On 9 April 2025, Donald Trump described his decision process: "Instinctively, more than anything else. I mean, you almost can’t take a pencil to paper. It’s really more of an instinct, I think, than anything else".  Montagu Norman, Governor of the Bank of England said in 1930: "I don't have reasons, I have instincts". For a country to have a high level of per capita GDP, this primeval yearning for power needs to be contained.

The first ring of containment is the checks and balances in the political system (e.g. converting the Bank of England into an inflation targeting central bank with dispersed power in the Monetary Policy Committee). A good financial system constitutes the second ring of containment that checks such impulses, that induces better decisions by the political masters.

From an Indian perspective, checks and balances are the essence of the growth journey. The first ring of containment is relatively well accepted (Kelkar & Shah 2022). More attention is required upon the second: a financial markets system that would induce checks and balances, that would matter enough to reduce the incidence of mistakes in public policy.

Consider government borrowing. When government borrowing takes place as a set of acts between consenting adults, where voluntary lenders negotiate a price on the bond market, this creates the checks and balances in the episodes narrated above. In India, about 95% of government borrowing is mobilised coercively (Chitgupi et. al., 2024), which limits the role that the financial markets play in reshaping the incentives of the state. 

Consider the exchange rate. The checks and balances in the episodes narrated above involved a starring role for the exchange rate. When poor countries run a government controlled exchange rate, this channel of influence is limited [EiE Ep67 Floating exchange rate], which sustains poverty.

In India, a disproportionate burden of adjustment falls upon the equity market as other markets adjust less.

In today's mainstream thinking, financial development is seen as integral to the journey of economic development through its allocative function.  `Finance is the brain of the economy', `Wall Street tells Main Street what to do'. The financial system should occupy `the commanding heights of the economy' and make all the detailed allocative decisions about firms, technologies or industries which receive investment [EiE Ep21 The beauty of finance]. A good financial system performs the allocative function better than `industrial policy' can [EiE Ep89 Industrial policy]. 

But finance plays another important function as well: that of reshaping the checks and balances of the state, or being the second ring of containment for power. The second ring of containment matters most when the first ring of containment -- checks and balances of the political system -- falters. These two lines of reasoning encourage us to place financial sector development at the centre of the growth journey [EiE Ep57 How to do development].

There was a time in India when we were making progress in building a financial system. This has faltered (Shah 2023;  EiE Ep71 The Journey of Finance). We need to get back to the knowledge building and community building that began in the early 1990s in this field.

Balancing Power and Accountability: An Evaluation of SEBI's Adjudication of Insider Trading

by Natasha Aggarwal, Amol Kulkarni, Bhavin Patel, Sonam Patel, and Renuka Sane.

Insider trading is considered to undermine the fairness of the market and erode investor confidence. The Securities and Exchange Board of India (SEBI) has, in recent years, increased its focus on, and intensified its enforcement of, insider trading cases. Expanding enforcement actions should prompt a deeper examination of how effectively SEBI is performing this function vis-a-vis the "rule of law". Adherence to the rule of law by the regulator promotes transparency, creates a stable and predictable environment for businesses and individuals and builds public trust in the regulatory system. Regulatory actions need to be evaluated on benchmarks grounded in legal theory and the extant legal framework.

In a new working paper, Balancing Power and Accountability: An Evaluation of SEBI's adjudication of Insider Trading, we evaluate SEBI's orders on insider trading cases over a 15-year period (2009 - 23) as well as the performance on these orders in appeal before the Securities Appellate Tribunal (SAT). We develop an evaluation framework based on elements of the rule of law applicable to regulatory adjudication, with 56 indicators for SEBI orders, and 82 indicators for orders of the Securities Appellate Tribunal (SAT).

This paper addresses three critical questions:

• What do SEBI's enforcement actions look like, and how have they evolved over the years?

  SEBI's annual reports provide some broad data about the total number of enforcement actions undertaken in a year, but do not provide details of the type of enforcement actions taken for each type of violation, the particular legal or regulatory provision alleged to have been violated, or the impact of successful enforcement actions in reducing instances of insider trading.

  Our dataset comprises 320 SEBI orders - 255 orders are by Adjudicating Officers (AOs) and 65 are by Whole-Time Members (WTMs). Each order can contain cases against multiple entities - we call them alleged violators. The 320 orders contain a total of 912 alleged violators. SEBI officers have imposed sanctions on 565 of the 912 alleged violators (62% of the alleged violators). AOs and WTMs have imposed penalties in 336 cases and 82 cases respectively. The median penalty amount for AOs is about Rs. 7.8 lakh, and for WTMs is about Rs. 15 lakh. Only WTMs, and not AOs, have the power to impose debarment and disgorgement. We observed that they have imposed disgorgement in 144 cases, and debarment in 192 cases. The average disgorgement amount is Rs. 46 crore, while the median is only Rs. 1 crore. The average period of debarment is 3 years, and a median of 1 year.

  Our paper illustrates the number of insider trading orders issued between 2010 and 2022. This shows that a spike in orders on insider trading from 2017, and then again in 2019. There has been a slight drop in the number of WTM orders in 2022. This is consistent with statements in the SEBI annual reports, which suggest that insider trading has been high on the regulator's agenda.

• Are SEBI's orders consistent with the requirements of procedural and substantive rule of law requirements?

  The procedural rule of law measures are based on administrative law and natural justice principles, and deal with how SEBI has been performing in terms of procedural fairness while adjudicating insider trading matters. One aspect of procedural fairness is that the orders should include certain basic information. We find several shortcomings in providing factual information on basic rule-of-law indicators. First, several orders do not mention basic facts about the case such as the date of show cause notice (7%), period of investigation (17%), period of UPSI (27%), and a description of UPSI (20%). Second, orders do not cite precedent. We find that about 87% of orders do not cite any previous AO or WTM order. Finally, the orders do not specify the full details of the sanctions imposed. In 12% of cases where disgorgement was ordered, the time period for payment was not specified. Similarly, for both penalties and disgorgement, interest rate was not specified in a large number of cases.

  The substantive rule of law measures are based on the law relating to insider trading. These dive a bit deeper than the procedural requirements, and examine whether the orders satisfy the requirements of applicable law and regulation. For example, a key component of a good order on insider trading should be that SEBI has been able to clearly demonstrate that the violator is an insider. We find that SEBI has identified a clear insider relationship in only 335 (60%) of its orders. In the remaining 230 orders, it has described a connection in 152 (66%) orders. Describing a connection is not as clear as specifying the connection. If we were to give SEBI the benefit of the doubt and consider it as an acceptable description, even then, in 14% of the cases SEBI has failed to provide any explanation on how a person is an insider

• How do SEBI's insider trading orders stand up to challenge before the Securities Appellate Tribunal (SAT)?

  Our analysis resulted in a set of 119 cases in the SEBI and SAT datasets. These cases result in 183 appeals (32%) out of the total 565 cases with sanction. Out of these, 97 (53%) were allowed, partly allowed, or remanded, while 86 (47%) were dismissed. This suggests that once appealed there is a 50% chance that the SEBI order will not hold in appeal.

  We find that the higher the sanction, the higher the proportion of appeals. 38% of AO cases and 17% of WTM cases with a penalty amount higher than Rs. 10 lakhs resulted in an appeal, relative to 22% of AO cases and 5% of WTM cases below Rs. 10 lakh. This is more pronounced in the case of debarment and disgorgement, where appeals are present for more than half the cases with higher sanctions. We also find that it is less likely that an AO or WTM case with penalty above Rs. 10 lakh or debarment for more than one year will be modified in appeal. 79% of WTM cases involving higher disgorgement amounts and all WTM cases involving a penalty below Rs. 10 lakh were modified in appeal.

Regulatory enforcement actions are necessary to ensure that those who violate the law face consequences, and may also have a deterrent effect on others. However, there are adverse consequences if these actions emerge from a flawed process, or if the actions taken are arbitrary or disproportionate. SEBI is ahead of other Indian regulators such as the Reserve Bank of India in at least publishing its orders. An appeal rate of between 30-38%, and a win rate of 50% at the SAT could be further improved by investments in order writing, and by re-evaluating the regulations on insider trading.

The authors are researchers at the TrustBridge Rule of Law Foundation.

Announcements

Socratic dialogues on cities, cooperation

Polekon is organizing socratic dialogues on 'The functional order of cities' and 'The architecture of cooperation'.

Also, a new cohort of political economy of development - a 4-week workshop on economic development - is starting April 5th.

About socratic dialogues

Socratic dialogues are guided conversations where participants explore ideas, develop habits of critical thinking and practice effective habits of communication.

This is a unique kind of conversation where asking "why?" isn't confrontational but rather opens a path to deeper understanding. Through sustained, structured dialogue, participants develop not just knowledge but the habits of mind essential for clear thinking - careful listening, precise speaking, examining assumptions, and tracing the roots of their opinions.

The functional order of cities

Cities shape our daily lives in profound ways, yet the principles that make them vibrant or lifeless, safe or dangerous, remain poorly understood. This program brings together two of the most insightful critics of urban planning and state simplification - Jane Jacobs and James C. Scott - to explore what makes cities work, why certain forms of planning fail, and how we might better balance the needs for both spontaneous vitality and planning in our cities.

Time: 5pm - 7pm
Dates: Sundays, April 12, 19, 26 and May 3, 2025
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The architecture of cooperation

There's a tendency to attribute all that is orderly to laws and legislations that must have made it so, and similarly attribute all that is disorderly to their absence or weak enforcement. But the machinery that enables the deep cooperation that is the defining characteristic of modern life has multiple gears; it is a mistake to attribute ubiquitous honesty to the single lever of state power.

We'll explore the architecture of cooperation - the hierarchy of instincts, norms and formal institutions that support cooperation in our modern world.

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Dates: Sundays, April 13, 20, 27, May 4 and 11, 2025
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Political economy of development

The workshop blends theory and history to provide a framework for thinking about India's economic development. It starts with the basics of economic growth, examines India's development path, and contrasts it with Taiwan, one of the rare success stories of the 20th century.

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