RBI News for July 2026
India posts $4.7 billion current account surplus in April despite FPI outflows
India recorded a current account surplus of $4.7 billion in April 2026, reversing a $4.8 billion deficit a year earlier, according to preliminary data from the Reserve Bank of India (RBI). The surplus came despite a wider merchandise trade deficit of $27.9 billion, up from $27.1 billion, as exports increased to $44.6 billion and imports rose to $72.5 billion.
Net services exports strengthened to $18.6 billion from $15.9 billion, while remittances surged to $16 billion from $9.4 billion. The net income deficit narrowed to $1.9 billion from $3 billion. On the capital account, foreign direct investment (FDI) more than doubled to $11.4 billion, with net FDI at $7.4 billion.
However, net foreign portfolio investment (FPI) outflows rose to $8.7 billion, and banking capital turned negative at $3.7 billion, compared with an inflow of $3.3 billion in the previous year, partially offsetting the current account gains.
RBI Considers Introduction of Durable Polymer Currency Notes in India
The Reserve Bank of India is evaluating the potential introduction of polymer-based banknotes, according to RBI Governor Sanjay Malhotra. While still in a preliminary stage, the central bank is reviewing the benefits and challenges of replacing cotton-based paper notes with polymer substrates. Polymer notes are made from specialized plastic materials, offering enhanced durability, resistance to moisture and dirt, and longer circulation life compared to traditional notes.
Globally, several countries, including Australia, the United Kingdom, Canada, and Singapore, have adopted polymer currency to reduce replacement costs and improve note longevity. Malhotra highlighted that, alongside other monetary and macroeconomic issues, the central bank is assessing whether such a move could enhance the quality and resilience of India’s currency in circulation.
If implemented, polymer notes could reduce costs of printing and maintenance, increase durability, and strengthen anti-counterfeiting measures, marking a significant modernization of India’s currency system.
Government Launches Unified Portal for Unclaimed Financial Assets
The Indian government has launched the ‘Your Money, Your Right’ campaign, introducing a centralized portal to help citizens locate and recover unclaimed financial assets. The platform, accessible via unclaimedassetsportal.in, serves as a single entry point connecting multiple regulator-managed claim systems for dormant bank deposits, insurance policies, unpaid dividends, and mutual fund investments.
Users can now track old savings accounts, fixed deposits, recurring deposits, and other inactive accounts through RBI’s UDGAM portal, enabling easier recovery of funds. The portal is designed to simplify access to otherwise scattered financial information, helping individuals reclaim unclaimed amounts across banks, insurers, and capital market intermediaries. This initiative aims to improve transparency, strengthen financial inclusion, and ensure that citizens can recover assets lying dormant for years without complicated procedures.
RBI Assures Adequate Cash Supply at ATMs Nationwide
Reserve Bank of India (RBI) Governor Sanjay Malhotra assured the public that sufficient currency is available across the banking system and that any local cash shortages at ATMs will be promptly addressed. This comes amid reports from the Confederation of ATM Industry (CATMi) highlighting difficulties in replenishing cash at several ATMs due to logistic constraints.
CATMi, a non-profit trade association representing ATM manufacturers and operators, warned that customers were being turned away at ATMs, causing transaction losses. Malhotra stated that the RBI will ensure that shortages are met quickly and efficiently, underscoring the central bank’s commitment to smooth cash availability. The initiative aims to support seamless banking services and maintain confidence in the financial infrastructure, particularly in high-demand locations and during peak transaction periods.
RBI lifts rate cap on FCNR(B) deposits
The Reserve Bank of India (RBI) has temporarily withdrawn the interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits with tenors of three to five years, effective from June 17, 2026, until September 30.
This regulatory relaxation allows banks greater flexibility in mobilising foreign currency deposits from non-resident Indians, encouraging inflows into the banking system. Previously, the interest on such FCNR(B) deposits was capped, limiting banks’ ability to offer competitive rates. Now, banks can align rates with prevailing market conditions, helping them attract and retain deposits from NRI clients. The move is expected to improve liquidity management for banks and enhance their funding options in foreign currency.
Deposits renewed on maturity for these tenors will also benefit from the lifted cap, giving banks greater operational freedom in managing their overseas deposit portfolio while maintaining compliance with the RBI’s regulatory framework.
RBI cancels registration of 135 NBFCs
The Reserve Bank of India (RBI) has revoked the certificates of registration for 135 non-banking financial companies (NBFCs) due to regulatory non-compliance or business cessation. The affected firms include Express Fincap House, Akshay Fiscal Services, Times Finance (P), Jupiter Projects (P), Jupiter Finvest, Essel Finance Business Loans, and Citiwide Financial Services.
Most of these NBFCs were registered in West Bengal. In addition, 13 NBFCs voluntarily surrendered their registrations due to business exits, mergers, amalgamations, or compliance with regulations for unregistered Core Investment Companies (CICs). Examples include J Thomas Finance, Econ-Super Sales, Hitesha Finance and Investment, Tinnevelly Tuticorin Investments, Carnex Vinimay, Impact Leasing, and Forerunner Capital Investments.
The RBI clarified that cancellations and surrenders are aimed at maintaining regulatory oversight and ensuring a healthy NBFC ecosystem by removing inactive or non-compliant entities from the system. This move reinforces the regulator’s commitment to safeguarding depositor interests and strengthening sectoral discipline.
RBI DG S. Janakiraman gets 2-year extension
The union government has extended the term of Swaminathan Janakiraman, Deputy Governor of the Reserve Bank of India (RBI), for an additional two years, effective from June 26, 2026.
Janakiraman, the senior-most deputy governor, initially assumed the role on June 26, 2023, and oversees key departments including supervision, inspection, consumer education, financial inclusion, protection, and human resource functions. Before his appointment at the RBI, Janakiraman held a long career at the State Bank of India, spanning over three-and-a-half decades, with experience across various banking functions.
He also holds an executive MBA from the National Institute of Business Management, Chennai. The extension reflects the government’s confidence in his leadership to maintain financial stability, strengthen regulatory oversight, and further the central bank’s objectives in promoting inclusive banking and robust governance across India’s financial sector.
Sahamati gets RBI recognition as SRO-AA
The Reserve Bank of India (RBI) has officially recognised Sahamati as the Self-Regulatory Organisation (SRO) for the country’s Account Aggregator (AA) ecosystem. Sahamati, a not-for-profit entity, operates the RBI-regulated NBFC-AA network, enabling consent-driven financial data sharing between Financial Information Providers (FIPs) and Financial Information Users (FIUs). The shared data is utilised for credit assessment, loan collections, customer evaluation, and fraud detection.
In April, Sahamati raised Rs 50 crore from banks including SBI, ICICI Bank, HDFC Bank, and Axis Bank, as well as NBFCs like Aditya Birla and Bajaj Finserv, and fintech firms such as Zerodha and IndMoney. The AA ecosystem includes over 1,120 regulated entities, 176 FIPs, 1,020 FIUs, and 17 AAs, with more than 450 million consent requests fulfilled. As SRO, Sahamati will standardise operations, support dispute resolution, ensure interoperability, and coordinate among ecosystem participants.
Differential deposit rates beyond RBI norms not acceptable
Reserve Bank of India Governor Sanjay Malhotra emphasised that banks offering interest rates higher than those disclosed officially is “not acceptable.” He commented amid reports that HDFC Bank allegedly paid additional sums to attract deposits, which the bank denied.
Malhotra clarified that differential pricing is permitted for senior citizens and varying deposit tenors, but banks must display rates transparently. Any undisclosed rates or incentives beyond approved levels are unacceptable.
Addressing questions on upper layer NBFCs, he stated that the RBI will soon release an updated list of entities while the current operational list remains valid. On inquiries about a core investment company seeking de-registration, Malhotra declined to comment. He highlighted the importance of transparency as banks compete for deposits, cautioning that regulatory compliance and fair disclosure remain mandatory.
RBI Eyes Structured Bulk Deposit Pricing to Reflect Liquidity Risks
The Reserve Bank of India (RBI) has proposed a draft framework for banks to adopt a more structured approach in setting deposit interest rates. The draft directions mandate that banks disclose their deposit rate schedules daily on their websites to ensure transparency. Interest paid must strictly adhere to these published rates, preventing any unannounced differential pricing.
Additionally, the RBI plans to allow differential rates on bulk deposits based on liquidity risk profiles. Retail deposits, considered more stable, generally attract lower run-off rates under the Liquidity Coverage Ratio (LCR) framework. In contrast, wholesale or non-retail deposits have higher run-off rates, increasing the liquidity cost for banks. By explicitly linking deposit pricing to liquidity risk, the central bank aims to formalise a systematic methodology for differential rates, ensuring banks price deposits according to associated funding costs.
This framework is expected to improve market discipline, enhance transparency for depositors, and support banks in managing liquidity more efficiently.
RBI Flags Reversal in Lending Rate Transmission
Commercial banks in India have experienced a modest rise in lending rates during April, despite the Reserve Bank of India keeping the policy repo rate unchanged. Governor Sanjay Malhotra noted that the transmission of monetary policy to retail borrowers had slowed, with some hardening observed in both deposit and lending rates.
The uptick in rates is partly due to robust credit demand, with scheduled commercial banks increasing the weighted average lending rate on fresh rupee loans by 10 basis points to 8.5 percent. The moderation in rate transmission highlights challenges in aligning market lending rates with policy rates, particularly when credit expansion accelerates.
RBI officials indicated that monitoring this trend is critical to ensure effective monetary policy implementation. The central bank continues to explore ways to maintain equilibrium between credit growth, liquidity, and interest rate alignment, aiming to support sustainable lending while controlling inflationary pressures.
RBI Sets Ambitious FY27 Agenda with Tech and Policy Reforms
The Reserve Bank of India (RBI) has unveiled a comprehensive agenda for the financial year 2026-27, with plans to review the RBI Act and implement significant technological upgrades. The central bank aims to launch its next-generation core banking system, e-Kuber 3.0, alongside an alternative payment system and a unified enterprise platform. Additionally, RBI plans to develop an AI-driven ecosystem to enhance central banking operations.
On the international front, the central bank will support India’s leadership role within BRICS finance discussions and explore currency swap frameworks with SAARC nations. Diversifying foreign exchange reserves will also be a priority amid global geopolitical risks. The RBI intends to expand Central Bank Digital Currency (CBDC) applications for direct benefit transfers and business transactions and test cross-border pilots. Payment systems will see improved consumer safeguards, including a potential “kill switch” to block transactions in case of fraud, alongside deeper UPI penetration in rural areas.
RBI Introduces Cooling-Off Norms for Co-Operative Bank Directors
The Reserve Bank of India (RBI) has amended governance norms for co-operative banks, mandating a three-year cooling-off period for directors completing ten consecutive years on the board. This provision applies to Urban Co-operative Banks (UCBs), State Co-operative Banks (StCBs), and Central Co-operative Banks (CCBs). Directors who resign temporarily and seek reappointment immediately will no longer circumvent the tenure cap.
The move reinforces the intent of the Banking Regulation Act and aims to strengthen board accountability. The maximum continuous tenure was previously increased from eight to ten years under the Banking Laws (Amendment) Act, 2025. The RBI’s action ensures rotation and prevents concentration of power, promoting good governance and stability within co-operative banks. UCBs have followed the rule since June 29, 2020, while StCBs and CCBs implemented it from April 1, 2021.
RBI Prepares Enhanced Banknotes with Security and Durability Features
The Reserve Bank of India plans to roll out upgraded banknotes equipped with enhanced security features and varnish treatments to improve longevity and hygiene. The announcement comes amid rising demand for cash, which pushed the currency-to-GDP ratio to 12.1% in FY26, and a marginal increase in counterfeit note detections, particularly for Rs 500 denominations.
Total banknote circulation rose 11.9% to Rs 41.24 lakh crore, while coin circulation increased 11.4% to Rs 40,814 crore. The RBI reported that operational costs for printing currency fell to Rs 4,875.2 crore in FY26 from Rs 6,372.8 crore in FY25 due to a reduced indent for fresh notes. The central bank is also introducing anti-microbial and anti-bacterial treatments integrated into banknote paper. The phased rollout of new currency notes is expected from mid-2026, aiming to enhance security, durability, and public trust in physical currency.
RBI May Introduce Risk-Based Internal Audit in Banks
The Reserve Bank of India (RBI) is considering mandating a Risk-Based Internal Audit (RBIA) framework for banks to strengthen oversight and risk management. The RBIA approach focuses audit resources on high-risk areas, material exposures, and systemic relevance, aiming to provide bank boards and committees with reasonable assurance regarding the adequacy of internal controls and risk management.
Under the proposed methodology, audits will prioritise identifying, assessing, and addressing the most significant risks faced by banks, including compliance and operational concerns. The framework also requires that any significant exceptions or excesses are promptly documented and rectified.
The RBI has released draft amendments under the Commercial Banks – Governance Second Amendment Directions, 2026, and invited comments from stakeholders and the public until July 9, 2026. Banks adopting RBIA will be expected to implement structured monitoring, risk reporting, and action plans that align with supervisory expectations, strengthening governance and resilience across the banking sector.
RBI Issues Advisory on Cyber Threats Linked to Mythos AI
The Reserve Bank of India (RBI) has issued an advisory for regulated entities to address potential cybersecurity threats emerging from the Mythos AI system. Deputy Governor Swaminathan J noted that RBI is fully prepared to handle risks posed by Mythos, an AI-based tool developed by Anthropic to detect software vulnerabilities and prevent exploitation by malicious actors.
Anthropic recently expanded Mythos access to over 15 countries, including India, with select corporates and financial institutions participating. RBI officials are consulting with government and regulatory bodies to determine the appropriate role for Indian entities in utilizing Mythos effectively.
While details remain under review, the central bank emphasized that readiness covers both traditional and AI-related cyber risks. This proactive advisory aims to safeguard the financial sector from emerging technological threats while fostering the safe adoption of AI-driven cybersecurity tools.
