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    DRI seizes over seven kg amphetamine and three kg cocaine as it intensifies crackdown on drug trafficking in country; three arrested
    DRI seizes 13 kg foreign-origin gold worth around Rs. 19.41 crore and dismantles a gold smuggling syndicate in Gujarat; three arrested
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    APEDA Facilitates Export of 1.755 MT of Organic Palmyra Jaggery Powder from Tamil Nadu to Bulgaria
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    The cumulative exports (merchandise & services) during April-September 2026-27 are estimated at US$ 476.20 Billion, as compared to US$ 418.31 Billion ...
    Union Minister of Commerce and Industry Shri Piyush Goyal Calls on Youth to Drive India’s AI Journey
    CCI approves acquisition of majority stake in Tribhovandas Bhimji Zaveri Limited by GRT Jewellers (India) Private Limited
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October 19, 2026
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Narcotics trafficking enforcement led to airport and road interceptions, baggage concealment detection, seizures, and arrests under the NDPS framework.
Narcotics trafficking enforcement under the Narcotic Drugs and Psychotropic Substances Act, 1985, involved intelligence-led interceptions at Bengaluru and Delhi airports and near Nagpur. Passenger baggage and a backpack were examined, leading to the seizure of amphetamine and cocaine and the arrest of three passengers. The recoveries included amphetamine concealed in baggage, a ladies' suit and a backpack lining, and cocaine contained in transparent packets within baggage.
October 19, 2026
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Gold smuggling syndicate enforcement traces concealed imports through airport handlers, illicit melting, and jewellery-market disposal under customs law.
Directorate of Revenue Intelligence enforcement action identified an organised gold-smuggling syndicate importing foreign-origin gold through Ahmedabad and Surat airports, followed by handover to handlers, intermediary routing, illegal melting, and cash-based supply through an Ahmedabad jewellery outlet. Further searches recovered undocumented foreign-origin gold bars and records concerning smuggled gold linked to a Dubai-based financier. The investigation identified interconnected roles across the movement, processing, and disposal of smuggled gold; three persons were arrested under the Customs Act, 1962.
October 19, 2026
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Free trade agreement utilisation requires origin compliance, product standards, and documentation to secure preferential export market access.
Effective FTA utilisation requires businesses to identify eligible products and markets, assess tariff preferences and rules of origin, and meet applicable quality, certification, documentation and importing-country requirements. Preferential access under agreements with the UAE, Australia, EFTA countries and the United Kingdom remains subject to each agreement's provisions and implementation status. Tariff preferences may improve price competitiveness and facilitate participation in international supply chains where product- and partner-specific conditions are satisfied.
October 19, 2026
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Drug prevention awareness initiatives engage students through health education, interactive activities and pledges supporting a drug-free society.
Mission Yuva Raksha advances preventive drug awareness and demand-reduction efforts among students through programmes at educational institutions in Madhya Pradesh. Sessions addressed the harmful effects of substance abuse on physical and mental health, education, family life and careers, supported by interactive learning activities. Participants were encouraged to avoid drugs, adopt healthy lifestyles, take pledges and support awareness initiatives in their schools, families and communities. Preventive education and youth engagement complement enforcement-oriented work through informed choices and community-based resistance to substance abuse.
October 19, 2026
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Coastal narcotics trafficking enforcement addresses suspected maritime methamphetamine smuggling through seizure, asset recovery, and arrests under drug-control law.
Intelligence-led narcotics enforcement addressed suspected coastal storage and maritime transfer of methamphetamine to Sri Lanka. Searches recovered crystal methamphetamine concealed in foil packets within duffel bags, which was seized under the Narcotic Drugs and Psychotropic Substances Act, 1985. Searches also recovered suspected drug-sale proceeds and vehicles allegedly used in transportation. Persons allegedly involved in organising coastal export, transport, storage and logistics were arrested and remanded to judicial custody.
October 17, 2026
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Centralised audit framework targets lower physical branch audit coverage while preserving regulatory oversight and maintaining remuneration.
For FY 2026-27, audit remuneration is to remain at existing levels. Member banks are advised to accelerate a centralised audit framework to improve cost efficiency while retaining comprehensive risk oversight. Physical statutory branch audit coverage should be reduced to cover 50% of total business, apart from centralised treasury audits. Audit coverage must align with SEBI listing and disclosure requirements and RBI guidelines, supported by a Board-approved policy for the centralised audit roadmap.
October 17, 2026
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Promissory estoppel cannot prevent Government shareholding dilution where enacted legislation imposes no restriction on strategic disinvestment.
Government shareholding in IDBI may be reduced or divested because the IDBI (Repeal) Act, 2003 contains no restriction on dilution of the Government's stake. A proposed amendment to limit dilution was rejected and not incorporated into the enacted law. Parliamentary statements cannot override statutory text, and promissory estoppel cannot be invoked on the basis of legislative debate statements to prevent dilution of Government shareholding. Successive Union Budget speeches also reflected a policy of transformation and strategic disinvestment of IDBI Bank.
October 16, 2026
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Recipient-generated e-invoicing under reverse charge enables eligible taxpayers to obtain IRNs for domestic unregistered supplies and imported services.
Eligible active registered recipients meeting the applicable aggregate annual turnover threshold may report recipient-generated self-invoices for specified reverse-charge domestic supplies from unregistered persons and imports of services. RCMDOM and RCMIMP must be selected as the relevant e-invoice supply types when reporting through an authorised Invoice Registration Portal. Submission and validation of prescribed invoice particulars would generate an Invoice Reference Number, subject to applicable GST provisions, notifications and e-invoice specifications.
October 16, 2026
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Reservation Policy Implementation in public financial institutions was examined through capacity building, practical deliberations, and measures for consistent application.
Implementation of the Government of India's Reservation Policy across public sector banks, public sector insurance companies, sectoral regulators and public financial institutions was addressed through capacity building to support uniform and effective application. Deliberations considered practical implementation issues, operational challenges and actionable measures for consistent policy application, alongside related welfare measures and interactive discussion of implementation questions.
October 16, 2026
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Organic agricultural export certification supports overseas market access for Palmyra Jaggery Powder through export-oriented producer linkages.
APEDA facilitated the maiden sea export of NPOP- and EU-certified organic Palmyra Jaggery Powder from Tamil Nadu to Bulgaria. The initiative seeks to diversify India's organic export basket, create market linkages for traditional Palmyra-based products, and improve producer access through export-oriented value chains. It covers organic cultivation and reports improved price realisation for participating farmers and the manufacturer compared with the domestic market. APEDA supports certified organic and value-added agricultural exports through market development, quality compliance, and overseas buyer linkages.
October 16, 2026
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Data-driven trade governance enables integrated monitoring, application analysis and evidence-based policy inputs through the National Strategic Trade Command Centre.
The National Strategic Trade Command Centre provides an integrated analytics and visualisation platform consolidating trade data to monitor trade indicators, scheme performance, application pendency, processing timelines, regional trends and compliance-related parameters. It enables analysis across national trade performance, Regional Authorities, schemes, products, destination markets and individual applications, subject to role-based access permissions. Initial dashboards cover key trade-facilitation and regulatory processes, including SCOMET, export promotion schemes, certificates of origin, importer-exporter registration and restricted imports and exports.
October 16, 2026
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Private capital mobilisation should use competitive financing, guarantees and risk mitigation to expand productive employment and productivity.
Private capital mobilisation is treated as essential to employment generation and productivity growth. Private enterprises, MSMEs and startups should remain central to job creation, with financing assessed by employment and productivity outcomes rather than volume. Guarantees, risk-mitigation instruments, local-currency financing and lower transaction costs are identified as means to expand affordable and predictable access to capital. Methodologies underlying governance indicators should be transparent, objective, evidence-based and responsive to diverse development experiences.
October 16, 2026
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Narcotics smuggling through misdeclared air cargo triggered seizure, arrest, and ongoing investigation into concealed hydroponic weed imports.
A Bangkok-origin air-cargo consignment declared as PU Tubes was examined on suspicion of mis-declaration. Plastic spools were found to contain concealed cavities holding polythene-wrapped packets of compacted green substance, preliminarily identified as suspected ganja/marijuana and described as hydroponic weed. The concealed substance, packaging and concealment material were seized under the NDPS Act, 1985. One person was arrested, and follow-up searches produced leads for continuing investigation.
October 16, 2026
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Unaccompanied baggage gold smuggling: concealed hardware and insider coordination triggered interception, seizure, and arrests under customs law.
Foreign-origin gold smuggling through the unaccompanied baggage channel involved concealment of gold within hardware items and coordinated retrieval through warehouse personnel and intermediaries. Intelligence-led interception resulted in recovery and seizure of foreign-origin gold concealed in a floor spring, metal locks, a grease gun and a door closer. The arrangement used a trolley secured by a pre-decided number-lock combination, with a warehouse staff member, mediator and receiver allegedly involved in delivery of the concealed gold.
October 16, 2026
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Opium cultivation licensing grievance redressal advances through public hearings, administrative remedies, policy recording, and a planned cultivator helpline.
Opium cultivation licensing grievances were addressed through a public hearing where cultivators raised irrigation, climatic, single-plot licensing, and village-wise allocation concerns. Participants were informed of available legal provisions and administrative remedies. Requests for more licences and larger cultivation plots were considered, with policy matters recorded. A helpline is intended to assist cultivators during the 2026-27 licensing operation.
October 16, 2026
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Illicit cannabis cultivation: crop destruction followed legal formalities, while investigation continues in a remote wildlife sanctuary.
Illicit cannabis cultivation was located by a joint DRI and CBN team across five stretches of remote, densely forested wildlife-sanctuary land near village Jamniapani, Shirpur, District Dhule, Maharashtra. The cultivation covered 2.87 hectares. Following requisite legal formalities, the cannabis crop was destroyed using a rotavator in the presence of Police and Forest Department officials. Investigation remains in progress.
October 15, 2026
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Merchandise and services trade estimates show export growth, import expansion, and a wider combined trade deficit over the reporting period.
Combined trade estimates for April-September 2026-27 show exports of US$ 476.20 billion and imports of US$ 551.13 billion, resulting in a trade deficit of US$ 74.93 billion. Merchandise exports rose to US$ 259.89 billion, while merchandise imports reached US$ 437.53 billion. Estimated services exports were US$ 216.31 billion and services imports were US$ 113.60 billion, producing a services trade surplus of US$ 102.71 billion. September services figures are estimates, and specified earlier-period data were revised using quarterly balance-of-payments data.
October 15, 2026
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Emerging technology skills and resilient supply chains are positioned as foundations for investment competitiveness and inclusive economic growth.
Ministerial policy priorities for India's trade, investment and technology agenda emphasise artificial intelligence, cybersecurity, technology adoption, manufacturing investment and lifelong skill development. Investment competitiveness is linked to political stability, resilient supply chains, and fair and transparent trading practices. The first tranche of a bilateral trade agreement with the United States has been finalised, while final contours and legal drafting continue before operationalisation.
October 14, 2026
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Majority stake acquisition in the jewellery sector receives competition clearance for GRT Jewellers' purchase of Tribhovandas Bhimji Zaveri.
Competition Commission of India approved GRT Jewellers (India) Private Limited's proposed acquisition of a majority stake in Tribhovandas Bhimji Zaveri Limited. The transaction concerns entities operating in the Indian gems and jewellery market, including a private limited acquirer and a publicly listed target engaged in manufacturing and sale of gems and jewellery.
October 14, 2026
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Minority shareholding acquisition in mother and baby healthcare receives competition clearance for a private equity-backed investment.
Competition Commission of India clearance authorises NuageLux BidCo S.a r.l. to acquire approximately 23% of the fully diluted shareholding in Kids Clinic India Ltd. The transaction constitutes an acquisition of a minority equity interest in a healthcare provider operating under the Cloudnine brand. NuageLux BidCo is a Luxembourg-incorporated private limited special purpose vehicle, ultimately controlled by Permira Holdings Ltd.

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India’s Journey from Crisis to Confidence (Speech by Shri Shaktikanta Das, Governor, Reserve Bank of India - January 17, 2024 - Delivered at an event organised by the Confederation of Indian Industry (CII), Davos, Switzerland)

January 18, 2024

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It gives me great pleasure to be here at Davos for the annual meeting of the World Economic Forum. While the winter outside is cold, the warmth of coming together of eminent leaders and experts from diverse fields more than compensates for it. These meetings assume greater relevance when fundamental changes are taking place in a global scale that would potentially shape our common destiny. I thank the Confederation of Indian Industries (CII) for giving me this opportunity to speak at this event.

2. Recent information on the global macroeconomic front has been somewhat reassuring with inflation gradually descending closer to the target, even as growth has held up better than expected. The odds of a soft landing have increased and this has enthused the financial markets. Financial conditions have eased, and markets have scaled new highs, raising concerns that they might be running ahead of themselves. At this critical juncture, certain hard facts have to be kept in mind, namely, global growth is slowing down; geopolitical situation continues to be fragile with new flash points and fear of supply chain disruptions; geo-economic fragmentation remains unabated undermining global trade; and the daunting climate related challenges are holding their ground.

3. Given this global setting, I propose to speak on the broad theme of India’s journey from crisis to confidence. I shall first dwell upon our recent experience in maintaining macroeconomic and financial stability, which are the prime responsibilities of a central bank. I shall then talk about the emerging fintech space and payments ecosystem that have become the hallmark of India’s success in financial innovation and inclusion. Finally, I propose to end with some concluding remarks.

Macroeconomic Stability

4. Amidst an uncertain and challenging global macroeconomic environment, the Indian economy presents a picture of confidence, positivity and optimism. Recent growth outturns have surprised most forecasts on the upside. After clocking real gross domestic product (GDP) growth of 7.2 per cent in 2022-23, real GDP is expected to grow by 7.3 per cent during 2023-24 according to the latest release by the National Statistical Office (NSO). With strong domestic demand conditions, India remains the fastest growing major economy and is now the fifth largest economy in the world. In fact, in purchasing power parity (PPP) terms, India is already the third largest economy. The International Monetary Fund (IMF) has projected that India’s contribution to world growth will rise from the current 16 per cent to 18 per cent by 2028. Strong domestic demand remains the main driver of growth, although there has been a significant increase in Indian economy’s global integration through trade and financial channels. Higher reliance on domestic demand cushioned India from multiple external headwinds.

5. We have emerged from the recent spate of shocks with stronger fundamentals – inflation is easing; bank and corporate balance sheets are stronger than before; fiscal consolidation is on course and its quality has improved; and the external balances are eminently manageable with strong forex reserves. The decisive and timely monetary policy actions of the Reserve Bank of India through appropriate policy rate and liquidity measures helped India’s quick and sustained recovery. Added to this, the structural reforms undertaken by the government over the last few years in the field of taxation, banking, ease of doing business, manufacturing, inflation management, digitalisation coupled with a clear focus on physical and digital infrastructure have boosted the medium and long-term growth potential of the economy. These reforms are continuously helping the Indian businesses to improve productivity and adopt technology driven changes across the spectrum. The manufacturing sector1 is undergoing a marked shift with support from the production linked incentives (PLIs) scheme. Services sector, which contributes the largest share to total value addition in the economy, is fast adopting new technologies to improve delivery, reach, and competitiveness. The external demand for India’s services is surging and diversifying rapidly from information technology related services to other professional services like business development, research and development, professional management, accountancy and legal services on the back of rising competitiveness.

6. Headline inflation has substantially eased from its highly elevated level of the summer of 2022. This disinflation is underpinned by steady moderation in CPI core (excluding food and fuel group) inflation. There is easing of price momentum across core goods and services. This would show that our monetary policy action of increasing the repo rate by 250 basis points between May 2022 and February 2023, together with rebalancing of liquidity, is working. Even as the cost-push pressures induced by high commodity prices and supply-side shocks have eased, adverse transitory food price shocks with their increasing incidence and intensity, are imparting considerable volatility to headline inflation. Pro-active supply side interventions by the government have played a significant role to mitigate the impact of food price shocks. Going forward, the inflation outlook would be considerably influenced by food prices, which remain uncertain. Recurring food price shocks could lead to de-anchoring of inflation expectations and generalisation of price pressures. Monetary policy, amidst these uncertainties, needs to be alert and remain actively disinflationary to steer inflation towards the target rate of 4 per cent on a durable basis. Needless to add that a stable inflation will provide the bedrock to India’s growth ambitions.

7. Turning to the outlook on inflation and growth for the next financial year (2024-25), our research teams are in the process of making a comprehensive assessment for our forthcoming February 2024 monetary policy. At this stage, our expectation is that the CPI inflation will average around 4.5 per cent in FY 2024-25. As regards growth, my sense is that the GDP growth in India will touch 7 per cent in FY 2024-25. I am saying this on the basis of strong momentum of economic activity seen in India. Consequently, growth would be 7 per cent and above for four consecutive years starting from FY 2021-22.

Financial Stability

8. Let me now turn to financial stability. A stable and efficient financial system is pivotal in safeguarding monetary stability; meeting the financing needs of the economy; protecting depositors and investors interests; and achieving sustainable economic growth. The banking sector is now characterised by robust earnings, strong buffers, renewed focus on governance and strengthening of balance sheets. This has been possible due to the efforts of the banks under the overarching, prudent and proactive financial sector policies adopted by the Reserve Bank of India. Overall, the Indian banking sector has seen a remarkable turnaround in the recent period. The Reserve Bank’s focus is not just on mere compliance with the regulatory parameters but on genuine strengthening of the internal defences of the banking system which has stood us in good stead as can be seen from the latest performance indicators.2

9. The non-banking financial companies (NBFC) sector is also reflecting sound performance parameters.3 Improved balance sheets of financial institutions are providing good support to durable and broad-based credit growth. Moreover, macro stress tests undertaken to assess the resilience of banks under adverse stress scenarios show that their capital ratios will remain sufficiently above the regulatory minimum.4 Rapid growth in retail loans, especially unsecured credit, and growing interconnectedness between banks and NBFCs, however, necessitated the Reserve Bank to take pre-emptive policy actions to prevent potential build-up of risks and safeguard financial stability.5

10. The recent developments in the banking system of some advanced countries drive home the importance of ensuring prudent asset liability management; robust risk management; sustainable growth in liabilities and assets; undertaking periodic stress tests; and building up capital buffers for any unanticipated future stress.6 The Reserve Bank has applied a judicious mix of micro and macroprudential measures to strengthen financial stability and support growth in the real economy.7

11. The Reserve Bank has overhauled the regulatory architecture of Banks, NBFCs, Urban Cooperative Banks and other segments of the financial ecosystem. Steps have also been taken for mitigating cyber security risks and enhancing operational resilience of the regulated entities Our approach has been to ensure that innovation is assimilated in the financial system in a non-disruptive manner while simultaneously ensuring appropriate customer protection.

12. In parallel, we have made a paradigm shift in the Reserve Bank’s supervision of the financial sector. The thrust has shifted towards early identification and remediation of risk factors by identifying root causes of vulnerabilities and triggering timely intervention before such factors culminate into distress. The systems have been recalibrated to be more proactive and forward-looking and to smell a distress early.

13. A key component of financial stability is to have a currency that is stable and appreciates or depreciates in an orderly manner. Various stakeholders in the economy including businesses, investors and, above all, the people stand to benefit from a stable currency. Excessive volatility has to be checked through market intervention by the central bank, more so in an emerging market economy (EME). The Indian rupee is a freely floating currency and its exchange rate is market determined. Its relative stability in the recent period is an outcome of the strength of the Indian economy, its macroeconomic fundamentals and improvements in India’s external position, particularly the significant moderation in the current account deficit (CAD) and revival of capital flows on the back of comfortable foreign exchange reserves. Labelling the Indian rupee in any other manner by cherry-picking time periods for analysis is not appropriate and grossly inconsistent with reality.

14. During the recent period of heightened uncertainty, the emerging market economies (EMEs) were at the receiving end of excess volatility in US dollar and bond yields. In view of the systemic importance of the US economy in the global financial system, spillovers from these fluctuations are not unexpected, especially in the context of shifting expectations about the monetary policy trajectory in the US and its own fundamentals. In such a situation, the EMEs, which have their own domestic dynamics and challenges, cannot afford to be held hostage by international financial cycles. EMEs have to act to safeguard their own interest. We agree that there should be flexibility in exchange rates, but it should not be a destabilising influence on the domestic economy of EMEs. Accordingly, multilateral institutions would do well to take a more nuanced and balanced view of the policy perspectives of the EMEs.

15. Overall, domestic macroeconomic and systemic risks in India have declined and the improving balance sheets of financial institutions, together with prudent policies of the regulators, have strengthened the resilience of the financial system.

Fintech and Payments Ecosystem

16. There are several aspects of the Indian economy which are reflecting a lot of promise. I have chosen one area which merits greater attention, namely, the FinTech and the Payments Ecosystem.

17. The FinTech ecosystem in India has tremendously improved the delivery of financial services by making them faster, cheaper, efficient and more accessible. India is currently the world’s third largest FinTech ecosystem in terms of the number of FinTech entities operating in India. The adoption rate of FinTech in India is 87 per cent, which is well above the global average of 67 per cent. India’s FinTech market is projected to reach USD 150 billion by 2025, a significant leap from USD 50 billion in 2021.8 The JAM trinity – a combination of bank accounts (Jan Dhan); Aadhaar (India’s biometric identity system that provides a single and portable proof of identity); and Mobile phone numbers – has revolutionised India’s FinTech ecosystem in terms of financial inclusion, digitisation of financial services, and overall service delivery.

18. The indigenously developed Unified Payments Interface (UPI) has been the game changer. Its success story has, in fact, become an international model. The interoperability of UPI across banks has created a unified payment ecosystem. Its user-friendly interface and QR code-based payments have made it very popular. It has facilitated digital payments for small businesses and street vendors, leading to greater financial inclusion. The success is visible with more than 12 billion transactions carried out through UPI in December 2023. Various recent enhancements to UPI like ‘Conversational Payments’ backed by an artificial intelligence powered system; offline transactions; and linkage of credit lines to UPI would further enhance its versatility. At the same time ‘UPI One World’ provides foreign nationals visiting India to transact payments through the UPI. The linkage between India’s UPI and Singapore’s PayNow bears testimony to the resilience of UPI as a potential global fast payment system. The journey continues as we have signed up MoUs with a few other countries to tap the benefits offered by UPI.

19. With 24x7 operationalisation of retail as well as large value payment system operated by the Reserve Bank, India is part of a club of select countries providing such round the clock facilities with real time gross settlement (RTGS). With such availability, more than 485 million digital payments happen every day. This phenomenal growth of digital payments is reflected in the Reserve Bank’s composite Digital Payment Index which has increased almost four-fold in the last 5 years.9

20. The Reserve Bank has taken several other initiatives to promote innovation. In 2019, the innovative Regulatory Sandbox framework was introduced. It allows live testing of financial products or services within a controlled environment. One of its notable successes is UPI123Pay, which enables offline UPI payments. The Regulatory Sandbox framework has been made interoperable in 2023 across multiple regulators. The annual Global hackathon, HaRBInger, organised by the Reserve Bank and the Innovation Hub set up by the Reserve Bank further amplify our collaborative efforts with the private sector in the pursuit of innovation.

21. As a step towards greater digitalisation, the pilot for our Central Bank Digital Currency (CBDC), e-Rupee, was launched in both wholesale and retail segments in November-December, 2022. Since then, 4 million customers have been onboarded. The CBDC will enhance digital transactions, especially in areas with limited internet connectivity. We expect our CBDC (e-Rupee) to become a global trendsetter and facilitate seamless cross-border payments.

22. Our approach to FinTech ecosystem is customer-centric, with focus on ensuring effective oversight, ethical conduct, risk management, and encouraging self-regulation by the FinTechs themselves by establishing a Self-Regulatory Organisation (SRO).

Conclusion

23. The global economy is confronted with multiple challenges. There is a dire need for collective and coordinated action by all stakeholders and global agencies. I am sure the discussions in Davos will energise the spirit of cooperation and guide us to a better future.

24. As far as the Indian economy is concerned, it is now poised for a long haul of higher growth. There are challenges, but they have to be dealt with effectively. With a confluence of factors in its favour, the confidence on India’s prospects is at an all-time high. We have to make this happen in reality. All stakeholders need to be unambiguously focused and take measures to support this journey.

Thank you. Namaskar

----

1 Based on first advance estimates (FAE) for 2023-24 released by NSO, manufacturing sector has a share of 17.7 per cent in GDP, while services sector has a share of 63.3 per cent in GDP.

2 The capital to risk weighted assets ratio (CRAR) of the banking system at 16.8 per cent remains sufficiently above the regulatory minimum, while profitability has grown to multidecadal highs. The return on assets and return on equity of the banking system are at 1.3 per cent and 13.7 per cent, respectively. Asset quality has further improved with gross non-performing assets (GNPA) ratio and net non-performing assets (NNPA) ratio falling to multiyear lows of 3.3 per cent and 0.8 per cent, respectively.

3 The CRAR of NBFCs at 27.6 per cent in September 2023 remains well above the regulatory minimum of 15 per cent; the GNPA ratio has declined from a high of 7.2 per cent in December 2021 to 4.3 per cent in September 2023; and NIM and RoA stood at 5.1 per cent and 2.8 per cent, respectively, in September 2023.

4 For instance, if a 250 basis points (the cumulative rate hike between May 2022-February 2023) parallel upward shift in the yield curve is applied, the mark-to-market impact on the held to maturity (HTM) portfolio of banks would reduce the system level capital to risk weighted assets ratio (CRAR) from 16.6 per cent to 13.1 per cent in September 2023. A similar shock on the trading portfolio would reduce the CRAR to 15.6 per cent. Under both instances, however, the CRAR will remain above the regulatory minimum.

5 Considering the persistent credit growth in certain segments of retail credit, pre-emptive measures were announced on November 16, 2023 to sober down undue exuberance which was clearly visible. Risk weights on certain segments of consumer credit were enhanced by 25 percentage points. The issue of interconnectedness through bank lending to NBFCs has also been addressed through higher risk weights.

6 In India, risk management measures are in place which allow banks to provide for interest rate risk with the upturn of the interest rate cycle. Sufficient levels of investment fluctuation reserves (IFR) – where banks transfer net profit on sale of investment until it reaches at least 2 per cent of the held-for-trading (HFT) and available for sale (AFS) portfolios – create necessary buffers for banks. Moreover, all commercial banks in India, irrespective of size, are subject to liquidity coverage ratio (LCR) guidelines which have stringent requirements for unsecured wholesale funding. The valuation guidelines on available for sale (AFS) category of investment are stringent and follow a conservative approach.

7 We have issued guidelines for large exposure framework, scale-based regulation for non-banking finance companies, and digital lending norms for supervised entities. We also make use of the other conventional measures such as sectoral risk weights, provisioning norms, loan to value ratio, among others, as macroprudential tools flexibly to address the occasional risks that are observed.

8 https://www.investindia.gov.in/sector/bfsi-FinTech-financial-services

9 The RBI’s composite Digital Payment Index has increased to 395.6 in March 2023 up from 100 as of March 2018.

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Acts Income Tax