RBI Annual Report 2025-26: Key Findings and Numbers

Why in the news

The RBI published its Annual Report for 2025-26, the statutory report of its Central Board on working during April 2025 to March 2026. It shows a fast-growing economy with very low inflation, a weaker rupee, foreign portfolio outflows and a bigger central bank balance sheet, all against stress from the West Asia conflict.

Key facts: the headline numbers

• Real GDP growth: 7.6% in 2025-26 (7.1% a year earlier); projection for 2026-27 is 6.9% with downside risks from costlier freight and energy.
• CPI inflation: 2.1% against 4.6% in the previous year, mainly because food got cheaper; 2026-27 forecast is 4.6%.
• Repo rate: cut by 100 bps to 5.25% (25 bps in April 2025, 50 bps in June 2025, 25 bps in December 2025).
• CRR: cut by 1 percentage point to 3.0%.
• Policy stance: accommodative in April 2025, back to neutral in June 2025.
• Balance sheet: 26.4% of GDP at 31 March 2026, up from 23.7%.
• Global backdrop: world output grew 3.4% in 2025 (3.3% in 2024); after West Asia hostilities began in late February 2026 the IMF cut its 2026 growth view to 3.1%, trade volume growth to 2.8% and raised inflation to 4.4%.

Scorecard by sector

Prices and the new CPI series

• MoSPI introduced a CPI series with base year 2024 in February 2026, using the 2023-24 household spending survey.
• Food and beverages weight fell from 45.9% to 36.8%; a combined housing-and-fuel division carries 17.7%; transport (8.8%) and information and communication (3.6%) became separate groups.
• Food prices dipped 0.8% over April-December 2025; tomatoes, onions and potatoes dropped 31.3% and pulses 13%, while edible oils and fats rose 15.0%.
• Fuel inflation reached 2.4% after LPG cylinder price hikes of Rs 50 (April 2025) and Rs 60 (March 2026).
• Core inflation stayed near 4.3%, pushed up by gold and silver prices.

Money, credit and markets

• Reserve money grew 10.8%, broad money 13.0% (9.4% before), money multiplier 6.1.
• Non-food bank credit rose 15.9%; loans to micro and small firms jumped 33.1%, medium firms 21.7%, personal loans 16.2%, and bank lending to NBFCs 26.3% after risk weights were restored in April 2025.
• The call rate stayed about 7 bps below the repo rate; 10-year G-sec yield crossed 7.04% in late March 2026.
• Sensex fell 7.1% to 71,948. FPIs sold a net Rs 2.7 lakh crore of shares; domestic institutions bought a net Rs 8.5 lakh crore.
• NEER and REER declined 6.9% and 7.5%.

Government finances

• States’ combined deficit is budgeted at 3.0% of state GDP; Centre’s transfers to states up 12.2%.
• Direct taxes projected at 6.9% of GDP in 2026-27, a ten-year high; central capital outlay to rise 11.5% to Rs 12.2 lakh crore.
• The Sixteenth Finance Commission kept the states’ share at 41% but added a 10% weight for contribution to GDP, trimmed income-distance to 42.5%, population to 17.5% and fiscal performance to 10%, and ended post-devolution revenue-deficit grants.

External sector

• Goods trade deficit widened to US$ 333.2 billion, yet net services exports (up 15.3%) and remittances (up 10.1%) held the current account deficit to 1.0% of GDP in April-December 2025.
• China overtook the US as India’s largest single trading partner; India concluded an FTA with the EU and agreements with the UK (CETA), Oman (CEPA) and New Zealand (FTA).
• Gross FDI rose to US$ 94.5 billion (net US$ 7.7 billion); equity FPI flows reversed by US$ 16.5 billion.
• Reserves of US$ 691.1 billion cover 11 months of imports and 90.3% of external debt.

Monetary policy transmission

• Banks cut the one-year median MCLR by 0.60 point; new-loan rates fell 0.95 point and outstanding-loan rates 0.78 point.
• Loans linked to external benchmarks reached 65.4% by December 2025: 89.2% in private banks against 50.6% in public banks.
• The RBI ended its daily 14-day repo and reverse repo auctions, relying on 7-day and fine-tuning operations; the SDF absorbed 84.9% of daily surplus liquidity.

Credit delivery and inclusion

• Priority sector lending reached 45.0% of adjusted net bank credit against a 40% floor; Small Finance Banks led at 78.8%.
• Collateral-free loan limit for micro and small enterprises doubled from Rs 10 lakh to Rs 20 lakh.
• Financial Inclusion Index moved to 67.0 (March 2025) from 64.2; 710 districts achieved full digital onboarding.
• Basic savings accounts total 7,304 lakh, 52% of them held by women.
• Panch-Jyoti: the 2025-30 financial inclusion strategy launched in December 2025, a 47-point plan on five pillars covering access, women-led inclusion, livelihoods and skills, financial education, and customer protection.

Regulation, markets and rupee internationalisation

• Over 11,000 circulars consolidated into 244 Master Directions; 64 draft directions issued.
• Unique Transaction Identifier made mandatory for OTC derivatives; municipal bonds accepted as repo collateral; FIMMDA recognised as a self-regulatory organisation.
• Dealers’ net open rupee position limit set at US$ 100 million by April 2026.
• Local-currency arrangements finalised with the UAE, Indonesia, Maldives and Mauritius; banks in 35 countries opened Special Rupee Vostro Accounts; rupee lending to counterparties in Nepal, Bhutan and Sri Lanka allowed.
• Export proceeds repatriation window extended from 9 to 15 months for regular exports.

Technology, payments and currency

• UPI volumes rose 30% to above 200 billion a year; digital payments index up 11%.
• Payments Vision 2028 (theme: Shaping India’s Payment Frontier, to December 2028) plans a Digital Payments Intelligence Platform and tighter limits on customer liability for e-fraud.
• Retail e-rupee pilots delivered food subsidies in Gujarat, Puducherry and Chandigarh; Unified Markets Interface built on wholesale CBDC; MuleHunter.ai deployed to detect mule accounts.
• Cash in circulation grew 11.4% (5.8% earlier); the Rs 500 note led in value and volume.
• Utkarsh 2029 is the RBI’s 2026-29 strategy.

Public debt and accounts

• Gross market borrowing for the Centre was Rs 14.6 lakh crore in 2025-26; budgeted at Rs 17.2 lakh crore gross and Rs 11.7 lakh crore net (3.0% of GDP) in 2026-27, funding 69.2% of the central deficit.
• The 50-year interest-free capital investment loan scheme for states was extended, lifting the pool by a third to Rs 2 lakh crore.
• Gold’s share of net foreign assets increased to 17.2% from 12.0%, owing to revaluation gains.

Background: PSL and the balance sheet

• Priority Sector Lending: general target 40% of ANBC (sub-targets: agriculture 18%, with 10% for small and marginal farmers; micro enterprises 7.5%; weaker sections 12%). RRBs 75%; SFBs and urban cooperative banks 60%.
• Shortfall goes into funds such as RIDF (with NABARD) or SIDBI-run funds.
• The RBI balance sheet lists foreign currency assets, gold, government securities and loans on the asset side; currency in circulation, bank deposits, government deposits and reserves on the liability side.
• The Economic Capital Framework follows the Bimal Jalan Committee (2019), with a Contingent Risk Buffer band of 5.5% to 6.5% of the balance sheet.

Exam angle

• Key numbers to memorise: GDP 7.6%, CPI 2.1%, repo 5.25%, CRR 3.0%, balance sheet 26.4% of GDP.
• New CPI base year: 2024 (earlier 2012); food weight 36.8%.
• Strategies and visions: Panch-Jyoti (inclusion 2025-30), Payments Vision 2028, Utkarsh 2029.
• Finance Commission: 16th, 41% devolution, 10% GDP-contribution weight.