India’s monetary and financial sectors have demonstrated strong performance in FY26 (April-December 2025) despite global uncertainties and technological changes, as per the Economic Survey 2025-26 presented in Parliament. The Reserve Bank of India (RBI) maintained liquidity effectively, ensuring ample liquidity in the banking system and supporting money and credit markets. The survey emphasizes the importance of innovative domestic finance channels to shield against global financial shocks.
The RBI’s regulatory framework, introduced in May 2025, emphasizes transparent and consultative monetary management and financial intermediation. India’s monetary policy aims to balance macroeconomic goals with social objectives, promoting economic resilience and inclusive growth. Measures like repo rate cuts and liquidity injections through CRR reductions and OMOs have boosted credit flow and economic activity, reflected in declining lending rates.
The survey notes a positive trend in broad money growth, indicating banks’ efficient use of liquidity from CRR cuts and RBI’s OMO purchases. The establishment of a Regulatory Review Cell under the new framework signifies a shift towards proactive governance in financial sector regulations. This approach allows for dynamic responses to market changes and global standards, ensuring regulatory effectiveness and adaptability.
