24/02/2026

BIZ & FINANCE TUESDAY | FEB 24, 2026

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India’s lending curbs seen squeezing trading firms

French cinema stars warn AI is ‘plundering’ industry PARIS: Just days before France’s version of the Oscars, thousands of French actors and filmmakers have warned that AI tools are “plundering” talent across the industry. “We are facing a profound upheaval in our profession with the arrival of artificial intelligence,” said the op-ed in Le Parisien , which was signed by some 4,000 artists. Signatories included many of French cinema’s brightest and best, such as actors Swann Arlaud, Franck Dubosc and Elodie Bouchez. While artificial intelligence was “extraordinarily valuable in certain fields”, they said it was a “devouring hydra for artists like us”. The op-ed, released ahead of the 51st edition of the French film industry’s Cesar Awards, warned of the rise of “unauthorised voice cloning” which has taken the industry by storm. “Not a week goes by without an artist sounding the alarm over the brutal competition AI is inflicting on their work.” It also pointed to the hundreds of lesser-known artists who “can’t afford to refuse a contract” and sign away their voices to AI “despite the risks to their image and their future”. “This organised plundering is not hypothetical – it’s happening here and now. It’s intolerable and it’s taking place before our very eyes.” The artists called for a clear “legal framework”so that AI can“coexist with artistic work, with the protection of copyright and related rights”. In recent months, the industry has introduced various initiatives to tackle the threat posed by AI and the flood of content replicating artists and their voices almost perfectly. In January, eight French voice actors sent formal notices to two US companies that had cloned their voices without consent. Actors have also taken to the streets of Paris under the slogan“Touche pas a ma VF” (Hands off my French dub). The debate goes far beyond France. Last week, Hollywood heavyweights accused the Chinese software Seedance 2.0, built by ByteDance, of copyright infringement after AI-generated videos, including of Tom Cruise brawling with Brad Pitt, went viral. – AFP

MUMBAI: The Indian central bank’s curbs on bank funding for proprietary trading could spur trading firms to shift business offshore and may force smaller players to shut down, executives and analysts said. Proposed rule changes that prohibit banks from lending for proprietary trading and require 100% collateral for other funding to brokers could see profit margins cut in half and a drop of up to a fifth in derivative trading volumes, the executives said. Reuters spoke to executives at six trading firms, both domestic and foreign. All declined to be identified as they are not authorised to speak to the media. The Reserve Bank of India’s initiative – due to take effect from April 1 – follows a series of steps taken by the government and market regulator to cool the explosive growth in the country’s equity derivatives market, which has lured mom and pop investors in droves, but with nearly 90% of them suffering losses, according to an official study. Analysts say policymakers are wary of the spillover risks to household finances and the wider economy. Under the current rules, trading firms use bank financing to ramp up leverage and reap big profits, outmaneuvering retail investors with their much higher level of sophistication. Having to tap other sources of capital that are typically pricier will greatly erode margins, the executives and analysts said. “Domestic proprietary trading firms fear that their business model o Offshore players may gain an edge through cheaper leverage

A man walks past an installation of the rupee logo and Indian currency coins outside the Reserve Bank of India headquarters in Mumbai. – REUTERSPIC

Analysts said the suspected fraud could impact the business of holding government cash balances, seen as lucrative due to the quantum of cash that moves through these accounts. Following the disclosure of the suspected fraud, the government of Haryana removed IDFC First Bank and another lender, AU Small Finance Bank, from the list of banks in which government accounts can be held, according to a notification from the state. The government notification did not share any information on why AU Small Finance Bank has been removed from the list. AU Small Finance said Haryana had Efforts thus far have included increasing fees for trading derivatives, reducing the number of contracts offered by exchanges, and raising taxes on profits from the trades. But while these measures brought down the number of contracts traded, the total value of the trades remains high, suggesting substantial capital continues to be deployed. The RBI’s new initiative to combat that may effectively penalise domestic players, according to the trading firm executives. Foreign trading firms could pause plans to set up operations in India and shift existing operations to offshore centres where financing is cheaper, giving them a competitive edge, three of the executives said. – Reuters

UBS estimates the suspected fraud amount at about 22% of IDFC First’s fiscal year 2026 profit after tax, though it expects the capital impact to be limited to around 1% of the net worth. Morgan Stanley pegs the potential hit to profit before tax at roughly 20%. Jefferies said the lender would need to reassure investors that the issue had not spread to other clients, and added that the matter did not appear to be systemic. IDFC First Bank has said it could make recoveries, including from accounts at other banks. The bank has insurance against employee dishonesty and can potentially recover 350 million rupees funding will be squeezed hardest because they lack large balance sheets or alternate credit access,” Mumbai-based brokerage firm IIFL said in a note this week. The pushback from trading firms echoes the reaction from the brokers lobby, which on Thursday urged a six-month suspension of the proposed rule changes to allow time for feedback and an assessment of the impact. The Reserve Bank of India and the Securities and Exchange Board of India did not respond to e-mails seeking comment for the story. Policymakers have been vexed as India’s derivatives market swelled to more than double the size of the underlying cash market, a stark and worrying contrast to the 2%-3% ratio in major global markets.

and deposits of 2.82 trillion rupees. The private lender reported that the suspected fraudulent transactions were limited to government-linked accounts at a branch in Chandigarh city, where discrepancies surfaced after entities related to the northern state of Haryana sought to close accounts and the balances did not match records. The issue came to light a month ago and the banking regulator, the Reserve Bank of India, is aware of the matter, IDFC First’s management said in a conference call yesterday. The RBI is watching developments at IDFC First Bank, governor Sanjay Malhotra said at a press conference following the central bank’s board meet. “There is no systemic issue with the bank,“ he said. The bank has suspended four has been rendered obsolete,” an executive at a domestic mid-sized proprietary trading firm said. “Large firms may still have some of their own capital to deploy but this will impact their growth prospects,” said the head of a large domestic high frequency trading (HFT) firm. The National Stock Exchange of India (NSE) is the world’s largest venue for equity derivatives, accounting for 70% of global index options trades, according to data from the World Federation of Exchanges. Proprietary trading makes up nearly half of overall derivative trading on NSE by value. HFT firms make up about 50% of proprietary trading, according to Jefferies. “Smaller proprietary firms that historically leveraged broker

IDFC First Bank tanks 20% on suspected fraud amounting to 5.9b rupees MUMBAI: Shares of India’s IDFC First Bank slumped as much as 20% yesterday, after the private lender disclosed suspected fraud amounting to 5.9 billion rupees (RM252 million) over the weekend, fueling concerns about the potential impact on its earnings. employees and appointed KPMG to conduct an independent forensic audit. through that, the management said on the analyst call, according to a Jefferies note. sought information on transactions in an account, which has been submitted. “Based on available facts at this stage and preliminary review, there is no indication of any financial impact or any fraudulent activity towards the Bank,” AU Small Finance Bank said in a statement to exchanges.

Shares of AU Small Finance Bank fell as much as 7.74% in their steepest percent loss in more than a year. “There will be greater scrutiny of government deposits in private sector banks,” Macquarie analysts said in a note. Total deposits from Haryana government form 0.5% of overall deposits for IDFC First and the impact is manageable, the bank’s management told analysts, according to Jefferies. – Reuters

The stock was trading 15.8% lower at 70.29 rupees, its lowest since October 2025, as of 11.46am IST, and was on course for its worst session in six years. The shares led losses among banks. India’s benchmark rose 0.35%. IDFC First Bank, a mid-sized lender, has attracted investments from the likes of Warburg Pincus and Abu Dhabi Investment Authority last year. The Mumbai-based bank has a loan book of 2.79 trillion rupees