**Executive Summary**
The Economic Survey 2025-26 highlights the robust performance of India's monetary and financial sectors despite global geopolitical uncertainty. The survey, tabled in Parliament by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, emphasizes balancing macroeconomic objectives with social goals, focusing on price stability, financial strength, and inclusive growth. It also makes note of the RBI's proactive liquidity management and the establishment of a Regulatory Review Cell.
**Key Points / Main Content**
* **Monetary Policy and Performance:**
* India's monetary and financial sectors exhibited robust performance in FY26 (April-December 2025).
* India's monetary policy balances macroeconomic objectives with social goals.
* Monetary policy is a key enabler of sustainable development and economic prosperity by maintaining price stability, supporting financial stability, and promoting inclusive growth.
* **RBI's Actions:**
* RBI reduced the repo rate and injected durable liquidity through CRR cuts and OMO in response to moderating inflation.
* RBI's liquidity management ensured adequate liquidity in the banking system throughout FY26.
* RBI's OMO purchases injected a surplus of about 1.89 lakh crore on average during FY26 (up to 8 January 2026).
* **Regulatory Framework:**
* RBI's landmark framework for the formulation of regulations was issued in May 2025, institutionalizing a transparent, consultative, and impact-driven approach to regulation-making.
* The Survey notes a dedicated Regulatory Review Cell under RBI's framework tasked with systematically examining each regulation at least once every five to seven years.
**Impact Analysis**
**Stakeholder: Banks**
* **Impact:** Banks have effectively leveraged the liquidity released by the CRR cut, resulting in positive broad money growth. The weighted average lending rates of scheduled commercial banks are declining.
* **Action Required:** Continue to leverage liquidity to boost credit flow, investment, and overall economic activity.
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** RBI's agile liquidity management and proactive monetary policy are contributing to economic resilience and growth.
* **Action Required:** Maintain proactive, anticipatory governance that can respond dynamically to evolving market conditions and global best practices. Continue monitoring and adjusting regulations through the Regulatory Review Cell.
Key Entities Referenced
Economic Survey 2025-26: A document providing an overview of the Indian economy's performance and policy measures.
Reserve Bank of India (RBI): The central bank of India, playing a key role in monetary policy and financial regulation.
Ministry of Finance: The government ministry responsible for India's financial matters.
Monetary Policy Committee: A committee within the Reserve Bank of India responsible for setting monetary policy.
Regulatory Review Cell: A dedicated cell under the RBI's framework for systematically reviewing financial sector regulations.
Ministry of Finance
INDIA'S MONETARY AND FINANCIAL SECTORS
ROBUST DESPITE THE UNCERTAIN GLOBAL
GEOPOLITICAL SCENARIO: ECONOMIC
SURVEY 2025-26
BALANCING MACROECONOMIC OBJECTIVES WITH SOCIAL
GOALS, INDIA’S MONETARY POLICY MAINTAINS PRICE
STABILITY AND FINANCIAL STRENGTH WHILE PROMOTING
INCLUSIVE GROWTH
RBI’S AGILE MANAGEMENT ENSURES ADEQUATE
LIQUIDITY IN BANKING SYSTEM, MEETING THE
ECONOMY’S PRODUCTIVE REQUIREMENTS
प्रव तथ: 29 JAN 2026 2:12PM by PIB Delhi
In an era characterized by heightened global uncertainty, geopolitical flux, and rapid technological
transformation, India's monetary and financial sectors have exhibited robust performance in FY26
(April-December 2025), underpinned by strategic policy actions and structural resilience across
financial intermediation channels. This was highlighted by the Economic Survey 2025-26, tabled by
Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, in Parliament today.
Regulatory innovation, transparency, and accountability are crucial for addressing the challenges of an
uncertain era, highlights the Economic Survey. Further, it states that tapping into innovative and
inclusive channels of domestic finance is necessary, as these can serve as a buffer against shocks to
volatile global finance.
In this context, the document informs, India's financial regulatory architecture demonstrates a clear
recognition of this imperative, as evidenced by RBI’s landmark framework for the formulation of
regulations issued in May 2025. This framework institutionalizes a transparent, consultative, and
impact-driven Monetary Management and Financial Intermediation approach to regulation-making.
The Economic Survey notes that India’s approach to monetary management balances macroeconomic
objectives with social goals. Further, the quality of financial sector regulation has emerged as a critical
determinant of economic resilience and sustained growth. The document states that by maintaining
price stability, supporting financial stability, and promoting inclusive growth, monetary policy acts as a
key enabler of sustainable development and economic prosperity in the country.
The document informs that in response to moderating inflation, the Reserve Bank of India's Monetary
Policy Committee reduced the repo rate, while injecting durable liquidity through cash reserve ratio
(CRR) cuts and open market operations (OMO). These reductions were aimed at boosting credit flow,investment, and overall economic activity. Further, these measures have been effectively transmitted to
lending rates, with the weighted average lending rates of scheduled commercial banks declining,
reflecting the true expansionary stance of monetary policy.
Throughout FY26, the Survey notes, RBI remained agile in its liquidity management, ensuring that
adequate liquidity was maintained in the banking system. This proactive approach facilitated effective
transmission to the money and credit markets, meeting the economy’s productive requirements.
Monetary policy transmission to lending and deposit rates of scheduled commercial banks (SCBs) has
been robust amid surplus liquidity conditions.
The document highlights that the positive trend in the broad money growth – over 12% from around
9% a year ago - indicates that the banks have effectively leveraged the liquidity released by the CRR
cut. Also, RBI’s OMO purchases injected durable liquidity into the system, as represented by a surplus
of about ₹1.89 lakh crore on average during FY26 (up to 8 January 2026), as measured by the net
position under the liquidity adjustment facility (LAF).
The Survey further takes note of a dedicated Regulatory Review Cell under RBI’s landmark
framework for the formulation of financial sector regulations. The Cell has been tasked with
systematically examining each regulation at least once every five to seven years. Such measures signal
a paradigm shift from reactive regulation to proactive, anticipatory governance that can respond
dynamically to evolving market conditions and global best practices.
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