 | | | Volume XXII | Issue 1 | April 2026
MONETARY & CREDIT INFORMATION REVIEW |  | | | | | | Note from the Editor In the April 2026 issue of MCIR, we present the latest policy announcement of the Reserve Bank of India, which has kept the repo rate unchanged at 5.25 per cent while maintaining a neutral stance amid heightened global uncertainties arising from the West Asia conflict. The issue highlights India’s continued macroeconomic resilience, with real GDP growth projected at 6.9 per cent and CPI inflation at 4.6 per cent for 2026–27, alongside emerging risks from elevated energy prices and supply disruptions. It also covers key regulatory and developmental measures aimed at supporting liquidity, enhancing ease of doing business and deepening financial markets, as well as the unveiling of the RBI’s medium-term strategy framework, Utkarsh 2029, outlining its strategic priorities for the coming years. We remain committed to our goal of sharing accurate information and fostering deeper understanding. The MCIR can be accessed at https://mcir.rbi.org.in as well as by scanning the QR Code. We welcome your feedback at mcir@rbi.org.in. Brij Raj
Editor | I. Monetary Policy Governor’s Monetary Policy Statement on April 8, 2026 Governor Shri Sanjay Malhotra announced the Monetary Policy Statement on April 8, 2026, against the backdrop of unprecedented global economic challenges arising from heightened geo-political tensions, the conflict in West Asia, and disruptions in global supply chains. While India’s macroeconomic fundamentals exuded confidence with buoyant growth and low inflation before the conflict, conditions turned adverse in March with the widening of the conflict zone and its intensification. Nonetheless, the Indian economy remains on a stronger footing compared to past crisis episodes, providing resilience. Global growth faces downside risks due to rising energy prices, inflation fears, financial market volatility, and weakening currencies amid heightened uncertainty. The Monetary Policy Committee (MPC) met during April 6–8 and unanimously decided to keep the policy repo rate unchanged at 5.25 per cent, with the SDF rate at 5.00 per cent and the MSF and Bank Rate at 5.50 per cent, while continuing with a neutral stance. The decision reflects concerns over rising geopolitical uncertainties and upside risks to inflation from energy prices and supply disruptions, even as headline inflation remains below target and core inflation pressures remain muted. The MPC emphasized a cautious “wait and watch” approach given the uncertain growth-inflation outlook. The conflict in West Asia is expected to impact the Indian economy through multiple channels, including higher crude oil prices, supply chain disruptions, weaker global demand, and tighter financial conditions. While real GDP growth for 2025-26 is estimated at 7.6 per cent, growth for 2026-27 is projected at 6.9 per cent, with risks tilted to the downside. Despite these challenges, domestic growth drivers such as private consumption, investment demand, services sector momentum, government infrastructure spending, and healthy financial sector balance sheets are expected to support economic activity. On inflation, recent data show headline inflation below target, with food prices stabilizing and core inflation remaining benign. However, rising energy prices and potential weather-related risks such as El Niño pose upside risks. CPI inflation for 2026-27 is projected at 4.6 per cent, with core inflation at 4.4 per cent, indicating that underlying price pressures remain contained but require close monitoring. External sector conditions remain stable, with adequate foreign exchange reserves and resilient services exports, although trade deficits and global uncertainties pose risks. Liquidity conditions remain comfortable, and the Reserve Bank has taken proactive measures to ensure sufficient liquidity in the banking system. Financial sector indicators, including capital adequacy and asset quality, remain strong, with robust credit growth. Additional measures were announced to promote ease of doing business, support bank capital adequacy, and develop the money market. The statement concluded with an emphasis on vigilance, flexibility, and commitment to maintaining stability while safeguarding the best interests of the economy amid evolving global challenges. To read more, please click here. Statement on Developmental and Regulatory Policies This Statement sets out various developmental and regulatory policy measures relating to (i) Regulations; (ii) Supervision; (iii) Payment Systems; and (iv) Financial Markets: I. Regulations 1. Review of guidelines for inclusion of Quarterly Profits in Capital to Risk-weighted Assets Ratio (CRAR) computation – Commercial Banks As per the extant guidelines, commercial banks (excluding Regional Rural Banks and Local Area Banks) are permitted to include quarterly net profits in the calculation of CRAR provided that the incremental provisions made for Non-Performing Assets (NPAs) at the end of any of the four quarters of the previous financial year, have not deviated more than 25 per cent of the average of the four quarters. On a review, it is proposed to dispense with this condition. The draft amendment directions in this regard will be issued for public comments shortly. 2. Review of Guidelines on Investment Fluctuation Reserve (IFR) Banks currently maintain Investment Fluctuation Reserve (IFR) as an additional buffer against depreciation in the value of their investments, subject to mark-to-market (MTM) requirements. Currently, commercial banks (including Local Area Banks, but excluding Small Finance Banks, Payment Banks and Regional Rural Banks) already maintain capital charge for market risk and also follow revised norms on classification, valuation, and operation of investment portfolio. In consideration of these applicable prudential requirements, it is proposed to dispense with the IFR requirement for such commercial banks. The existing guidelines for other bank categories are also being revised to address the operational challenges encountered by such banks in complying with the regulatory thresholds on IFR and to harmonise instructions across bank categories, thereby enhancing regulatory clarity and consistency. Draft directions in this regard will be issued shortly for public consultation. 3. Review of matters placed before the Boards of the Banks The matters to be placed before the Boards of banks, along with their periodicity, are determined by the Boards themselves, guided by the seven broad themes prescribed by the Reserve Bank of India. Meanwhile, the Reserve Bank has also mandated certain policies and matters to be placed before the Board for approval, review, or information. In an endeavor to enable Boards to utilize its time effectively, and to facilitate a more focused and qualitative engagement on strategy and risk governance, the Reserve Bank has undertaken comprehensive review and rationalization of all such instructions. Draft directions in this regard will be issued shortly for public consultation. II. Supervision 4. Consolidation of Supervisory Instructions The Reserve Bank has constantly endeavored to refine and strengthen its regulatory and supervisory framework while minimising compliance costs, through periodic evaluation of instructions for their continued relevance. In furtherance of this objective, Reserve Bank had undertaken a comprehensive consolidation exercise of the regulatory instructions, on an ‘as is’ basis, in 2025. The exercise involved consolidation of more than 9000 existing regulatory circular/ guidelines into 238 function-wise Master Directions (MDs), specific to each category of regulated entity. A similar exercise has now been carried out for the supervisory instructions. Accordingly, the drafts of 64 Master Directions consolidating extant supervisory instructions on up to nine functional areas are being published today on RBI website for public comments. III. Payment Systems 5. Simplifying the onboarding process of MSMEs in Trade Receivables Discounting System (TReDS) With a view to facilitating timely access to working capital for MSMEs, guidelines for Trade Receivables Discounting System (TReDS) were issued in 2014 and subsequently updated in 2018. The scope of TReDS was further expanded in 2023 with the inclusion of insurance companies as the fourth participant. In order to promote ease of doing business for MSMEs and to encourage their greater participation on TReDS, it is proposed to dispense with the requirement of due diligence of MSMEs while onboarding on TReDS platforms. A comprehensive review of other extant instructions has also been undertaken, and draft directions will be issued shortly for public consultation. IV. Financial Markets 6. Development of Term Money Market An active-term money market, apart from providing an alternative funding avenue to the market participants, also helps in enhancing monetary policy transmission by creating a link between the overnight money market and longer-term interest rates. At present, only banks and standalone primary dealers are eligible to participate in the term money market, with certain prudential limits. With a view to further enhance the depth of participation and liquidity in the term money market segment, it has been decided to (a) expand the participant base in the term money market segment to include non-bank participants viz., AIFIs, NBFCs, including housing finance companies, companies, etc.; and (b) enhance the borrowing limit in the term money market for standalone primary dealers. The revised directions are being issued separately. Minutes of MPC The 60th Meeting of the Monetary Policy Committee, constituted under Section 45ZB of the Reserve Bank of India Act, 1934, was held during April 6 to 8, 2026. Accordingly, under Section 45ZL of the Reserve Bank of India Act, 1934, the Reserve Bank published the minutes of the proceedings of the meeting on April 22, 2026, i.e., the fourteenth day after meeting of the MPC. The MPC also reviewed in detail the staff’s macroeconomic projections that included inputs from survey results and stakeholder consultations. The MPC also reviewed alternative scenarios around various risks to the outlook. Drawing on the above and after extensive discussions on the stance of monetary policy, the MPC adopted the resolution in the said meeting. To read more, please click here. II. Regulation RBI issues Amendment Directions on ‘Non-Banking Financial Companies – Branch Authorisation Directions’ The Reserve Bank issued the draft Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026, seeking comments from NBFCs and other stakeholders till February 27, 2026. The draft instructions proposed to modify the extant guidelines on opening of branches as applicable to various categories of NBFCs (including HFCs). 2. Feedback received on the draft instructions has been examined and consequent modifications have been suitably incorporated in the final Amendment Directions. Statement on the feedback received on the draft instructions is provided in the Annex. 3. Accordingly, the Reserve Bank on April 15, 2026, issued the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026 to amend the extant instructions relating to opening of branches by NBFCs. Consequently, relevant paragraphs of the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025 and the Reserve Bank of India (Housing Finance Companies) Directions, 2025, have also been suitably updated. III. Utkarsh 2029 – Reserve Bank of India’s Medium-term Strategy Framework for 2026-29 The Reserve Bank of India had adopted the Medium-term Strategy Framework (Utkarsh 2.0) covering the period 2023-2025 in December 2022 which guided the Bank’s progress towards realisation of the identified milestones. In continuation of the above and building upon the progress made thereunder, the Bank has now prepared its Medium-term Strategy Framework Utkarsh 2029 for the period April 2026 to March 2029. The framework encompasses six strategy pillars guided by a succinct vision statement and values. The six strategy pillars highlighting the broad strategic priorities of the Bank are: Each pillar encompasses overarching, forward-looking and medium-term deliverables. The regular functions of RBI will continue under the Annual Action Plan of the respective Departments. The Reserve Bank of India attaches high importance to its medium-term strategy and monitors its implementation and progress through a Sub-committee of its Central Board. | 4. The objective of these Amendment Directions is to provide operational flexibility to NBFCs for branch expansion to facilitate ease of doing business while ensuring necessary regulatory compliance. RBI issues Directions on Asset Classification, Provisioning, and Income Recognition for Commercial Banks The Reserve Bank of India had, on October 07, 2025, issued the Reserve Bank of India (Commercial Banks-Asset Classification, Provisioning and Income Recognition) Directions, 2025 for stakeholder feedback. The feedback received on the draft Directions has been examined and consequent modifications, as deemed appropriate, have been suitably incorporated in the final Directions. A statement on the feedback received on the draft Directions is provided in the Annex. Accordingly, the Reserve Bank on April 27, 2026, issued the final Directions. Consequentially, 13 Amendment Directions and one Repeal Directions have also been issued. To read more, please click here. RBI issues Final Directions on Basel III - Capital Charge for Credit Risk under Standardised Approach The Reserve Bank had, on October 07, 2025, issued the Draft Reserve Bank of India (Scheduled Commercial Banks - Capital Charge for Credit Risk – Standardised Approach) Directions, 2025 seeking feedback from stakeholders. The draft Directions proposed amendments to the existing standardised approach framework for calculating the capital charge for credit risk with the objective of enhancing its robustness, granularity, and risk sensitivity as well as convergence with the international standards. 2. Feedback received on the above draft has been examined and the consequent modifications, as decided by the Reserve Bank, have been suitably incorporated in the Final Directions. A statement on the feedback received for the draft Directions is provided in the Annex. 3. Accordingly, the Reserve Bank of India on April 27, 2026 issued the Reserve Bank of India (Scheduled Commercial Banks - Capital Charge for Credit Risk – Standardised Approach) Directions, 2026. These Directions shall be effective from April 1, 2027. Mission SAKSHAM (SAHKARI BANK KSHAMTA NIRMAN) for Capacity Building of the UCB Sector The Reserve Bank launched Mission SAKSHAM - a mission-mode, sector-wide, all-India capacity-building training initiative for Urban Cooperative Banks (UCBs) - on April 28, 2026, under which a large number of training programmes (in-person as well as e-learning courses) will be conducted for UCBs, covering about 1.40 lakh participants across target groups including Board Members, Senior Management, Heads of Risk, Compliance and Audit functions, and employees in IT and other critical areas, with content delivery in regional languages to the extent feasible, designed in consultation with the Umbrella Organisation of UCBs and National / State Cooperative Federations, to enhance managerial and operational capabilities, improve compliance culture, strengthen institutional resilience, and establish a sustainable, self-reinforcing ecosystem for continuous learning, contributing significantly to systemic stability and healthy growth and development of the UCB sector. IV. Financial Markets RBI issues directions on ‘Reporting Instructions for Authorised Dealer Category – I Banks’ The Reserve Bank of India had issued the draft directions on ‘Reporting Instructions for Authorised Dealer Category-I Banks’ on February 16, 2026, seeking feedback from market participants, stakeholders and other interested parties. With a view to enhance transparency in the foreign exchange market, the directions require Authorised Dealer Category-I banks to report foreign exchange derivative transactions involving INR undertaken by their related parties globally to the Trade Repository of the Clearing Corporation of India Limited (CCIL). The feedback received on the draft directions has been examined and consequent modifications have been suitably incorporated in the final directions issued by RBI on April 27, 2026. Statement on the major feedback received is provided in the Annex. Certain feedback on reporting formats and other operational aspects have been shared with CCIL for examination. V. Payments and Settlement Systems RBI issues consolidated directions on Digital Payments – E-mandate framework, 2026 The Reserve Bank issued directions on Digital Payments – E-mandate framework, 2026, on April 21, 2026 The directions consolidate extant instructions on e-mandates as also incorporate a few minor changes based on feedback obtained from stakeholders. RBI issues Draft Master Direction on Prepaid Payment Instruments (PPIs), 2026 The Reserve Bank issued a draft Master Direction on Prepaid Payment Instruments on April 22, 2026 as part of its continued efforts to develop a conducive framework for long term growth of PPIs with enhanced security of transactions, following a comprehensive review of existing guidelines; comments/feedback on the draft may be submitted by regulated entities and members of the public/other stakeholders on or before May 22, 2026 through the ‘Connect 2 Regulate’ section on the website by following the corresponding hyperlink provided against each document in the page where they are hosted. VI. Publications Monetary Policy Report The Reserve Bank on April 8, 2026 released the Monetary Policy Report 2026. The report highlighted resilient global and domestic growth amid geopolitical and inflationary headwinds, with India’s economy supported by consumption, investment, and monetary easing—though risks from rising energy prices, supply disruptions, and currency volatility persist, prompting continued focus on price stability and growth support. To read more, pleas click here. RBI Bulletin – April 2026 The Reserve Bank released the April 2026 issue of its monthly Bulletin on April 23, 2026. The Bulletin includes Bi-Monthly Monetary Policy Statement (April 6 to 8, 2026), two speeches, one article and current statistics. In current statistics, Table 19 on Consumer Price Index is revised in line with the new CPI (base 2024=100) and now includes data on a measure of core inflation (i.e. CPI excluding food and fuel). The article is on the State of the Economy. State of the Economy The conflict in West Asia has intensified pressures on the global supply chains in March with some easing observed in the first half of April. Domestic economic activity displayed resilience in many segments with slowdown in a few others. CPI inflation, driven by fuel and food, marginally edged up in March. The money market and bond yields moderated after the temporary ceasefire in West Asia. A slowdown in imports and expansion in exports narrowed trade deficit to a nine-month low. Foreign portfolio investment (FPI) flows remained volatile, although net foreign direct investment (FDI) turned positive in February. The views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India. To read more, please click here. VII. Data Release & Surveys Important data and surveys released by the Reserve Bank during the month of April 2026 are as follows:
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