Reserve Bank of India (RBI)

The Reserve Bank of India (RBI) is India’s central bank and monetary authority, a body corporate constituted under the Reserve Bank of India Act 1934 (Act No. 2 of 1934) that began operations on 1 April 1935 and has been wholly owned by the Government of India since 1 January 1949. It sets the repo rate, issues banknotes, regulates banks and non-banking financial companies, and manages the country’s foreign exchange reserves. Its central office is in Mumbai, and its Governor since 11 December 2024 is Sanjay Malhotra, the 26th to hold the post.

The repo rate is 5.50 per cent from 7 October 2026, after the six-member Monetary Policy Committee voted 6 to 0 at its 63rd meeting to raise it by 25 basis points and moved the policy stance from neutral to “calibrated tightening” (RBI press release 2026-2027/1264). That was the first increase after a cutting cycle that took the rate down to 5.25 per cent on 5 December 2025 and held it there through four meetings in 2026. The statutory inflation target, retained by the Central Government on 25 March 2026 for the five years to 31 March 2031, is consumer price inflation of 4 per cent within a band of 2 to 6 per cent.

The RBI’s powers come mainly from four statutes: the RBI Act 1934 for currency, monetary policy and its own constitution; the Banking Regulation Act 1949 for banks; the Foreign Exchange Management Act 1999 for foreign exchange, current account transactions and capital account transactions in debt instruments; and the Payment and Settlement Systems Act 2007 for payment systems, including the Unified Payments Interface . Under Section 45W of the RBI Act it also directs the money, government securities, foreign exchange and interest rate derivative markets, which is where its decisions reach the price of every debt mutual fund and bank deposit in the country.

For a retail investor, the RBI is the regulator behind the bank account, the fixed deposit, the UPI payment and the NBFC loan, while SEBI is the regulator behind the demat account, the stock exchange and the mutual fund . The two meet in the bond market, in foreign portfolio investment, and in the Financial Stability and Development Council chaired by the Union Finance Minister.

Table: Headline RBI figures as published by the RBI, as of 18 October 2026.

Policy rates and the October 2026 decision

The RBI’s policy repo rate is 5.50 per cent from 7 October 2026, set by the Monetary Policy Committee at its 63rd meeting (5 to 7 October 2026) in a unanimous vote that raised it by 25 basis points from 5.25 per cent. The same resolution, RBI press release 2026-2027/1264, moved the standing deposit facility (SDF) rate to 5.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.75 per cent, and changed the stance from neutral to “calibrated tightening”, which the RBI said means “rate cuts are off the table in the near term”.

The stance was the only point of disagreement. The resolution records that two external members, Dr Nagesh Kumar and Prof. Ram Singh, “were of the view that the stance be retained at neutral”. The committee projected CPI inflation for 2026-27 at 5.2 per cent and real GDP growth at 7.1 per cent. The minutes, which carry each member’s statement, are due on 21 October 2026, and the next two meetings are scheduled for 2 to 4 December 2026 and 3 to 5 February 2027.

The rate path into the hike, from the RBI’s own resolutions:

Table: RBI policy rate decisions, December 2025 to October 2026, from the MPC resolutions published on rbi.org.in.

The RBI homepage’s current-rates panel, updated 17 October 2026, also lists a fixed reverse repo rate of 3.35 per cent, a cash reserve ratio of 3.00 per cent and a statutory liquidity ratio of 18.00 per cent. Earlier decisions in the 2025 easing cycle are covered in the monetary policy of the RBI entry and the repo rate entry.

Statutory basis under the RBI Act 1934

The Reserve Bank of India is constituted by Section 3 of the Reserve Bank of India Act 1934, and its powers over currency, monetary policy and its own governance are set out in numbered sections of that Act. The sections a reader most often needs, from the Act as amended by the Finance Act 2022:

Table: Principal sections of the Reserve Bank of India Act 1934, from the Act as amended by the Finance Act 2022.

The monetary policy chapter, Chapter III-F (Sections 45Z to 45ZO), was inserted by the Finance Act 2016 with effect from 27 June 2016. Before that date the Governor set the policy rate alone; since then the repo rate has been a committee decision that binds the RBI.

The other three statutes divide the regulated world. The Banking Regulation Act 1949 gives the RBI licensing, inspection and direction powers over banks, including the directions under Section 35A, read with Section 56, that it issues to co-operative banks to restrict withdrawals and new business; five such directions were issued between 20 and 28 April 2026 (RBI press releases 2026-2027/105, 119, 141, 153 and 157). Under the Foreign Exchange Management Act 1999 the RBI regulates foreign exchange dealings and capital account transactions in debt instruments, while transactions in non-debt instruments such as equity have been prescribed by the Central Government, in consultation with the RBI, since Section 6(2A) came into force on 15 October 2019. The Payment and Settlement Systems Act 2007 requires every payment system operator, from the National Payments Corporation of India to a prepaid wallet issuer, to hold RBI authorisation.

Governor, Deputy Governors and the Central Board

Sanjay Malhotra is the 26th Governor of the Reserve Bank of India, appointed for three years from 11 December 2024, according to the RBI’s list of Governors; the Appointments Committee of the Cabinet order described him as an Indian Administrative Service officer of the 1990 batch serving as Secretary, Department of Revenue. The Governor chairs both the Central Board and the Monetary Policy Committee.

Section 8(1) of the RBI Act allows not more than four Deputy Governors, and in October 2026 all four posts are filled:

Table: Deputy Governors of the Reserve Bank of India as listed on rbi.org.in in October 2026. T. Rabi Sankar’s tenure ended on 2 May 2026.

The Central Board of Directors governs the RBI’s affairs. Under Section 8(1) it consists of the Governor, the Deputy Governors, four directors drawn one each from the four Local Boards, ten directors nominated by the Central Government, and two Central Government officials. Under Section 8(3), a Deputy Governor and the government official nominated under clause (d) may attend and take part in board deliberations but are not entitled to vote, except that a Deputy Governor authorised in writing by the Governor may vote for the Governor when the Governor cannot attend. At the 623rd meeting on 22 May 2026, which approved the 2025-26 accounts, the government official present was Nagaraju Maddirala, Secretary, Department of Financial Services, and the nominated directors included Satish Kashinath Marathe, Revathy Iyer, Prof. Sachin Chaturvedi, Anand Gopal Mahindra, Venu Srinivasan and Pankaj Ramanbhai Patel.

The four Local Boards under Section 9 represent the Western, Eastern, Northern and Southern Areas defined in the First Schedule, five members each. The Act names areas, not cities. The Local Boards advise the Central Board and hold no executive authority over the RBI’s operations.

Monetary Policy Committee and the inflation target

The Monetary Policy Committee (MPC) is the six-member statutory body under Section 45ZB of the RBI Act that sets the repo rate, and its decision binds the RBI. Three members come from the RBI: the Governor as chairperson, the Deputy Governor in charge of monetary policy, and one RBI officer nominated by the Central Board. Three are appointed by the Central Government on the recommendation of a search-cum-selection committee chaired by the Cabinet Secretary under Section 45ZC, must be under 70, and under Section 45ZD(1) serve four years with no reappointment.

The members recorded in the October 2026 resolution are Governor Sanjay Malhotra, Deputy Governor Poonam Gupta, Indranil Bhattacharyya as the RBI’s nominated officer, and the three external members, Dr Nagesh Kumar, Saugata Bhattacharya and Prof. Ram Singh. Under Section 45ZI the RBI must hold at least four MPC meetings a year and publish the schedule in advance; decisions go by majority of members present and voting, with the Governor holding a second or casting vote on a tie. Section 45ZL requires the minutes, including each member’s vote, to be published on the fourteenth day after the meeting.

The inflation target is set by the Central Government, not by the RBI. Under Section 45ZA it is fixed in terms of the Consumer Price Index once every five years, in consultation with the RBI. The RBI’s monetary policy framework page records three settings:

Table: India’s statutory inflation target, from the RBI monetary policy framework page and Gazette notification S.O. 1580(E) of 25 March 2026.

Failure is defined by government notification, not by the Act itself. The Central Government has notified that the target is failed when average CPI inflation is above the 6 per cent upper tolerance level, or below the 2 per cent lower level, for any three consecutive quarters. Section 45ZN then requires the RBI to send the government a report stating the reasons for the failure, the remedial actions proposed, and an estimate of the time within which the target will be achieved.

The measure being targeted changed in 2026. The April 2026 MPC resolution refers to “the new CPI series (2024=100)”, so inflation figures quoted from 2026 onwards are on the 2024 base and are not directly comparable with older prints on the 2012 base.

Policy instruments and the liquidity adjustment facility

The RBI implements the repo rate through the liquidity adjustment facility (LAF), a corridor whose floor is the standing deposit facility rate and whose ceiling is the marginal standing facility rate, each set 25 basis points from the repo rate. In October 2026 the corridor runs from 5.25 per cent (SDF) through 5.50 per cent (repo) to 5.75 per cent (MSF). The operating target, according to the RBI’s monetary policy framework page, is the weighted average call rate (WACR), which the RBI aims to align with the repo rate through liquidity management.

Table: RBI policy instruments and their levels, from MPC resolution PR 2026-2027/1264 (7 October 2026) and the RBI current-rates panel (17 October 2026).

Day-to-day liquidity is managed by auction. The RBI runs variable rate repo (VRR) auctions to inject funds, such as the 4-day VRR auction held on 30 April 2026 (press release 2026-2027/177), and variable rate reverse repo auctions to absorb them. Durable liquidity moves through open market purchases and sales of government securities, foreign exchange swaps, and changes in the CRR.

For a debt fund investor the corridor is the anchor of the shortest yields. An overnight fund or a liquid fund earns close to the overnight and money market rates inside the corridor, so its yield follows the repo rate within days of a change. A gilt fund holding long-dated government securities moves the other way on price: when yields rise after a hike, the mark-to-market value of its existing bonds falls.

Regulation of banks and NBFCs

The RBI licenses, regulates and supervises scheduled commercial banks (public sector, private, foreign, small finance and payments banks ), regional rural banks, urban and state co-operative banks, non-banking financial companies , all-India financial institutions and credit information companies. Its instructions to them now sit in Master Directions organised by type of entity.

Master Directions consolidation, November 2025

On 28 November 2025 the RBI issued 244 Master Directions, including seven new directions on digital banking channels, consolidating about 3,500 instructions across 11 types of regulated entity, and withdrew 9,445 circulars (RBI press release 2025-2026/1588). A bank, NBFC or co-operative bank now reads the Master Direction for its own class of entity rather than a chain of amending circulars, and any page citing an older circular as the current rule needs checking against the consolidated text.

Capital and provisioning rules effective 1 April 2027

Two final directions issued on 27 April 2026 change how banks hold capital and provide for bad loans from 1 April 2027:

• The Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions 2026, issued after a draft of 7 October 2025, move commercial banks to an expected credit loss approach; 13 amendment directions and one repeal direction were issued with them (RBI press release 2026-2027/150).
• The Reserve Bank of India (Scheduled Commercial Banks - Capital Charge for Credit Risk - Standardised Approach) Directions 2026 revise the Basel III standardised approach to credit risk for greater risk sensitivity and closer convergence with international standards (RBI press release 2026-2027/149).

Domestic systemically important banks

The RBI’s 2025 list of domestic systemically important banks (D-SIBs), released on 2 December 2025, keeps the same three banks in the same buckets as the 2024 list. Each must hold additional Common Equity Tier 1 capital, as a percentage of risk-weighted assets, over and above the capital conservation buffer:

Table: RBI list of D-SIBs, press release 2025-2026/1613 of 2 December 2025, under the D-SIB framework of 22 July 2014 as updated on 28 December 2023.

The base Basel III minimum ratios could not be confirmed at a primary source against the current capital adequacy direction, so no figure is stated here.

NBFC scale-based regulation and the Upper Layer

NBFCs are regulated under a scale-based framework in four layers by size and risk: the Base Layer, the Middle Layer, the Upper Layer and a Top Layer. Entities the RBI identifies for the Upper Layer face the closest requirements to those for banks. The 2026-27 Upper Layer list, released on 6 August 2026 (RBI press release 2026-2027/823), names 17 NBFCs: REC, Power Finance Corporation, Indian Railway Finance Corporation, Bajaj Finance, Shriram Finance, LIC Housing Finance, Cholamandalam Investment and Finance, Tata Capital, Tata Sons (pending its application for de-registration), Muthoot Finance, Aditya Birla Capital, HUDCO, Mahindra & Mahindra Financial Services, L&T Finance, Bajaj Housing Finance, HDB Financial Services and Piramal Finance.

Upper Layer NBFCs issue commercial paper and bonds of the kind held by corporate bond funds and credit risk funds , so the credit standing of an RBI-regulated NBFC feeds directly into those schemes’ NAVs. The IL&FS defaults of 2018 , at a group whose parent was registered with the RBI as a core investment company, are the documented case; the intervention that followed was by the Central Government before the National Company Law Tribunal, not by the RBI.

Money, government securities and foreign exchange markets

The RBI regulates the markets in money, government securities, foreign exchange and rupee interest rate derivatives under Section 45W of the RBI Act, which empowers it to “determine the policy relating to interest rates or interest rate products and give directions” to anyone dealing in them. The proviso to Section 45W excludes the execution and settlement of trades on stock exchanges recognised under the Securities Contracts (Regulation) Act 1956, which stays with SEBI . A currency future on the National Stock Exchange is therefore a SEBI-regulated trade in an RBI-regulated underlying market.

As the Central Government’s debt manager, the RBI conducts the weekly auctions of dated government securities and treasury bills; primary dealers underwrite them in separate underwriting auctions, such as the one for the Rs 32,000 crore sale of government securities on 22 May 2026 (press release 2026-2027/302). Retail investors can bid in the non-competitive segment through RBI Retail Direct or a broker, compared in RBI Retail Direct versus Zerodha for bonds , as the Zerodha G-sec bidding guide describes, under the cut-off times the RBI sets; the G-sec naming convention and interest payment schedule are covered separately.

The rupee’s daily reference rate is published by Financial Benchmarks India Ltd (FBIL), not by the RBI itself; the RBI homepage reproduces it, and on 16 October 2026 the FBIL USD/INR rate was 95.0194 at 1.00 pm. Older documents refer to the RBI reference rate , which FBIL replaced.

Foreign exchange reserves and FEMA

India’s foreign exchange reserves were USD 726,027 million (Rs 70,22,417 crore) as on 9 October 2026, according to the RBI Weekly Statistical Supplement released on 16 October 2026 (press release 2026-2027/1341), down USD 8,578 million over the week. Foreign currency assets make up 82 per cent of the total:

Table: India’s foreign exchange reserves, RBI Weekly Statistical Supplement, position as on 9 October 2026.

The RBI administers the Foreign Exchange Management Act 1999 , under which current account transactions are free unless restricted and capital account transactions are permitted only as specified. Since 15 October 2019, when Section 6(2A) came into force, the Central Government prescribes capital account transactions in non-debt instruments such as equity shares, in consultation with the RBI, while the RBI regulates transactions in debt instruments. Three FEMA rules that reach an Indian investor directly:

• The Liberalised Remittance Scheme , an RBI scheme, caps a resident individual’s remittances abroad at USD 250,000 a financial year, the limit that governs direct overseas share purchases; the tax collected at source on those remittances is an income tax rule, not an RBI one.
• The industry-wide limits on overseas investment by Indian mutual funds, which have repeatedly halted fresh subscriptions to international funds , are administered by SEBI within the overall limit for the industry, covered in overseas investment limits .
• Non-resident Indians invest through NRE and NRO accounts whose repatriation rules are FEMA rules, covered in the NRI mutual fund compliance guide .

Foreign portfolio investors register with SEBI, while the RBI sets the limits on their investment in government and corporate debt.

Currency management

The RBI has the sole right to issue bank notes in India under Section 22 of the RBI Act, and the Central Government issues coins. A note series can be demonetised only by the Central Government, by notification under Section 26(2), on the recommendation of the RBI’s Central Board.

2016 demonetisation

The Rs 500 and Rs 1,000 notes then in circulation were withdrawn as legal tender by a Section 26(2) notification of 8 November 2016. A five-judge Constitution Bench of the Supreme Court upheld the notification by a four-to-one majority on 2 January 2023, in Vivek Narayan Sharma v. Union of India (Writ Petition (Civil) 906 of 2016), with Justice B.V. Nagarathna dissenting. The share of the withdrawn notes returned to the banking system, usually attributed to the RBI Annual Report 2017-18, could not be confirmed at a primary source, so no figure is stated here.

Withdrawal of Rs 2,000 notes

The RBI announced the withdrawal of Rs 2,000 notes from circulation on 19 May 2023 (press release 2023-2024/257). The notes remain legal tender. The exchange and deposit facility at bank branches ended on 7 October 2023, and both remain available at the RBI’s 19 Issue Offices, including by post through India Post.

Table: Status of withdrawal of Rs 2,000 notes, RBI press release 2026-2027/190, 1 May 2026.

Digital rupee

The digital rupee, or e-Rupee, is the RBI’s central bank digital currency: a direct liability of the RBI, held in wallets offered by participating banks, rather than a deposit that is a liability of a commercial bank. Its legal basis is Section 2(aiv) of the RBI Act, inserted by Section 125 of the Finance Act 2022, which defines a bank note as one “whether in physical or digital form”. The digital rupee entry covers the pilots.

Payment systems oversight

The RBI authorises and oversees every payment system in India under the Payment and Settlement Systems Act 2007 , and itself operates the two large interbank systems, RTGS for large-value transfers and NEFT for retail transfers. Retail rails such as UPI , IMPS , RuPay and NACH are operated by the National Payments Corporation of India , an RBI-authorised operator. On 21 April 2026 the RBI issued consolidated directions on the e-mandate framework for digital payments (press release 2026-2027/116), the rules under which UPI AutoPay SIPs and other recurring debits run.

Merchant discount rate on UPI

The zero merchant discount rate (MDR) on UPI and RuPay debit cards was a statutory regime set by the government, not an RBI decision. From 1 January 2020, Section 10A of the Payment and Settlement Systems Act 2007, read with Section 269SU of the Income-tax Act 1961, the income tax statute then in force, barred a bank or system provider from charging MDR on payments by RuPay debit card, BHIM-UPI and UPI QR code to businesses covered by the rule (CBDT Circular 32/2019, 30 December 2019).

The Department of Financial Services has stated a change from 15 October 2026. Its FAQ dated 15 September 2026 states that an MDR of 0.4 per cent applies to person-to-merchant UPI payments above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 and above, and that capital-market payments, including payments to mutual funds, stockbrokers and dealers, carry 0.02 per cent capped at Rs 300. Payers pay nothing. Because the zero MDR rested on Section 10A and Section 269SU, the change needs an amending legal instrument, and that instrument could not be confirmed at a primary source, so this page does not state that the charge is being collected. NPCI postponed the start on 15 October 2026, the day it was due, to after Diwali, according to All India Radio (newsonair, 15 October 2026), and no new date had been published by 19 October 2026.

Income, balance sheet and surplus transfer

The RBI’s balance sheet was Rs 91,97,121.08 crore on 31 March 2026, 20.61 per cent larger than a year earlier, and its Central Board approved a surplus transfer of Rs 2,86,588.46 crore to the Central Government for the accounting year 2025-26 at its 623rd meeting on 22 May 2026. The surplus is what remains of the RBI’s income, chiefly interest on government securities and foreign assets and gains on foreign exchange operations, after expenses and provisions.

Table: RBI accounts for 2025-26, from the RBI press release on the 623rd meeting of the Central Board, 22 May 2026.

The transfer is governed by the Economic Capital Framework, which the Bimal Jalan committee designed in 2019 and the RBI has since revised. Under the revised framework the Contingent Risk Buffer, the RBI’s provision against monetary, credit and operational risk, can be held anywhere between 4.5 and 7.5 per cent of the balance sheet. For 2024-25 the transfer to the buffer was Rs 44,861.70 crore; for 2025-26 the Central Board more than doubled it to Rs 1,09,379.64 crore, held the buffer at 6.5 per cent, one percentage point below the top of the band, and still transferred Rs 2.87 lakh crore to the government.

Consumer protection and deposit insurance

A customer of a bank, an NBFC covered by the scheme, a non-bank prepaid payment instrument issuer or a credit information company complains to the RBI under the Reserve Bank - Integrated Ombudsman Scheme 2026 (RB-IOS 2026), which came into force on 1 July 2026 and replaced the 2021 scheme. Complaints received before 1 July 2026 continue under the 2021 scheme.

The conditions, from the RBI’s FAQ on RB-IOS 2026:

1. The complaint must first go to the regulated entity, with proof that it did.
2. The Ombudsman will not take it before 30 days have passed (or the time set by RBI, NPCI or card network rules, if longer), unless the entity has replied and the customer is dissatisfied.
3. It must be filed within 90 days of that period expiring or of the entity’s last communication, whichever is later.
4. The Ombudsman can award up to Rs 30 lakh for consequential loss, plus up to Rs 3 lakh for the complainant’s time, expenses, harassment and mental anguish.

Complaints are filed on cms.rbi.org.in, and the RBI’s contact centre runs on toll-free number 14448. A complaint about a mutual fund or a broker goes to SEBI’s SCORES instead; a complaint about a bank’s handling of a mutual fund payment or mandate is an RBI matter, as the RBI bank complaint guide sets out. The full scheme is in the RBI Integrated Ombudsman Scheme entry.

Bank deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to a maximum of Rs 5,00,000 per depositor per bank, principal and interest together, covering savings, fixed, current and recurring deposits but not deposits of foreign governments, Central or State Governments, or other banks. A mutual fund unit has no equivalent insurance, so a bank fixed deposit is insured up to Rs 5 lakh and a banking and PSU debt fund holding paper from the same banks is not insured at all.

Financial stability

The RBI publishes the Financial Stability Report twice a year, in June and December, with stress tests of scheduled commercial banks, NBFCs and the interconnections between them. The report reflects the assessment of the sub-committee of the Financial Stability and Development Council , the coordination body of India’s financial regulators chaired by the Union Finance Minister, on which the heads of the RBI, SEBI, IRDAI and PFRDA sit.

The RBI’s systemic tools are the D-SIB surcharges, the Upper Layer NBFC regime, the Prompt Corrective Action framework that restricts weak banks’ dividends and expansion, and the direction and reconstruction powers of the Banking Regulation Act 1949. The write-down of Yes Bank’s Additional Tier 1 bonds in the bank’s March 2020 reconstruction, bonds held by several debt mutual funds, is covered in its own entry, including the litigation over the write-down.

Relationship with SEBI and other regulators

The RBI and SEBI divide India’s financial system by instrument and by venue: the RBI regulates banks, NBFCs, payment systems, foreign exchange and the over-the-counter debt and money markets, and SEBI regulates exchanges, brokers, depositories, mutual funds, listed companies and their securities. The boundary is drawn in Section 45W of the RBI Act and in the SEBI Act 1992 .

Table: Division of responsibilities between the RBI and SEBI, by statute.

Where the regulators disagree over who regulates a hybrid instrument, the RBI Act supplies the forum. Section 45Y, the Joint Mechanism, was inserted by the Securities and Insurance Laws (Amendment and Validation) Act 2010 (Act No. 26 of 2010) with effect from 18 June 2010, after the dispute over unit-linked insurance plans, and applies when there is a difference of opinion on whether an instrument with a money market, securities or insurance component falls within the jurisdiction of the RBI, SEBI, IRDAI or PFRDA. Older pages that name an RBI-SEBI “Joint Coordination Committee” cite no instrument for it; the statutory body is the Section 45Y Joint Mechanism, and routine coordination runs through the Financial Stability and Development Council.

What RBI decisions mean for mutual fund investors

An RBI rate decision reaches a mutual fund investor in three ways, each measurable. The first is yield: an overnight or liquid fund’s portfolio reprices to the new corridor within days, so the 25 basis point increase of 7 October 2026 raises the running yield of those schemes by about the same amount once their holdings roll over. The second is price: a longer-duration debt scheme’s existing bonds fall in value when market yields rise, by roughly the scheme’s modified duration multiplied by the yield change, which is why the yield to maturity and modified duration on a factsheet matter more after a stance change than before it. The third is credit: a default or a resolution at a bank or NBFC the RBI regulates, as with the IL&FS group in 2018 and Yes Bank in 2020, changes the value of that issuer’s paper in a scheme at once and can trigger side-pocketing .

The RBI also writes the payment and foreign exchange rules a mutual fund investor works within: the e-mandate directions behind UPI AutoPay SIPs, the Liberalised Remittance Scheme limit on investing abroad, and the FEMA rules for NRIs. The 0.02 per cent MDR on capital-market UPI payments announced for 15 October 2026, and postponed by NPCI that day, is a Department of Financial Services statement, not an RBI rule. Taxation of the resulting returns is set by the income tax statute, not the RBI, and is covered in debt mutual fund taxation .

History and Governors

The Reserve Bank of India began operations on 1 April 1935 under the RBI Act 1934 as a shareholders’ bank, with Sir Osborne Smith as its first Governor (1 April 1935 to 30 June 1937). It was transferred to public ownership on 1 January 1949 under the Reserve Bank of India (Transfer to Public Ownership) Act 1948 (Act 62 of 1948), and has been wholly owned by the Central Government since. Sir Benegal Rama Rau, Governor from 1 July 1949 to 14 January 1957, is the longest-serving Governor in the RBI’s list.

Table: The four most recent Governors of the Reserve Bank of India, with tenure dates as listed on rbi.org.in.

Patel resigned before completing his term; the RBI lists his tenure as ending on 11 December 2018. Das’s tenure, from 12 December 2018 to 10 December 2024, ran just under six years.

Corrections to commonly repeated claims

Several statements about the RBI circulate on older pages, including the version of this entry published before 18 October 2026, and are wrong or out of date:

• The repo rate is not 5.25 per cent. It was 5.25 per cent from 5 December 2025 to 7 October 2026 and is 5.50 per cent from 7 October 2026 (PR 2026-2027/1264).
• The RBI did not introduce zero MDR on UPI in December 2019. The zero MDR was a statutory regime under Section 10A of the PSS Act and Section 269SU of the Income-tax Act 1961 from 1 January 2020 (CBDT Circular 32/2019), and the Department of Financial Services announced a new MDR from 15 October 2026, which NPCI postponed that day to after Diwali.
• The Financial Stability Report is published in June and December, not January and July.
• Expected credit loss is no longer a “mid-2020s” plan. Final directions were issued on 27 April 2026 and apply from 1 April 2027 (PR 2026-2027/150).
• The 2021 Ombudsman scheme is no longer current. RB-IOS 2026 replaced it from 1 July 2026.
• The latest surplus transfer is not Rs 2.11 lakh crore. The 2025-26 transfer was Rs 2,86,588.46 crore (Central Board, 22 May 2026).
• FEMA does not give the RBI control of every capital account transaction. Non-debt instruments have been prescribed by the Central Government under Section 6(2A) since 15 October 2019.
• There is no statutory RBI-SEBI “Joint Coordination Committee”. The statutory forum for jurisdiction disputes is the Section 45Y Joint Mechanism.
• “Three consecutive quarters” is in a government notification, not the RBI Act. Section 45ZN leaves the failure factors to the Central Government.
• The Act’s Local Boards are for areas, not named cities.

See also

• Monetary policy of the RBI
• Repo rate
• Monetary Policy Committee
• Sanjay Malhotra
• Securities and Exchange Board of India (SEBI)
• SEBI Act 1992
• Banking Regulation Act 1949
• Payment and Settlement Systems Act 2007
• Foreign Exchange Management Act 1999
• Liberalised Remittance Scheme
• Unified Payments Interface
• NPCI and Indian payments infrastructure
• UPI mandate
• UPI 2.0 mandate explained
• Digital rupee
• Demonetisation of 2016
• RBI Integrated Ombudsman Scheme
• DICGC deposit insurance
• Financial Stability and Development Council
• Non-banking financial company
• Small finance bank
• Payments bank
• Paytm Payments Bank
• State Bank of India
• Bank of Baroda
• Account aggregator framework
• Banking sector mutual funds
• Bank Nifty
• Nifty Bank index funds
• Nifty 10-year G-sec index
• Money market mutual funds
• Credit quality in debt mutual funds
• Bharat Bond ETF
• Corporate bonds on Zerodha
• Franklin Templeton winding up, 2020
• Mutual funds in India
• Mutual fund
• AMFI
• SEBI Investment Management Department
• Bombay Stock Exchange
• NSDL
• CDSL
• Clearing Corporation of India
• Demat account
• Initial public offering
• KYC for mutual funds
• Permanent Account Number
• Aadhaar
• Digital Personal Data Protection Act
• NRE route for mutual funds
• NRO route for mutual funds
• Sovereign gold bonds
• GIFT City

External references

• Reserve Bank of India
• RBI monetary policy framework
• RBI list of Governors
• RBI Complaint Management System
• Deposit Insurance and Credit Guarantee Corporation
• National Payments Corporation of India
• Department of Financial Services, Ministry of Finance

References

1. Reserve Bank of India Act 1934 (Act No. 2 of 1934), as amended by the Finance Act 2022: Sections 2(aiv), 8, 9, 13, 22, 26, 45W and 45Z to 45ZO.
2. RBI. Monetary Policy Statement 2026-27: Resolution of the Monetary Policy Committee, 5 to 7 October 2026. Press release 2026-2027/1264, 7 October 2026.
3. RBI. Resolutions of the Monetary Policy Committee, 5 December 2025, 6 February 2026, 8 April 2026 (press release 2026-2027/36), 5 June 2026 (2026-2027/385) and 5 August 2026 (2026-2027/809).
4. Government of India, Ministry of Finance, Department of Economic Affairs. Notification S.O. 1580(E), 25 March 2026, inflation target for 1 April 2026 to 31 March 2031; and RBI, Monetary Policy Framework page.
5. RBI. 623rd Meeting of the Central Board of the Reserve Bank of India. Press release, 22 May 2026.
6. RBI. Weekly Statistical Supplement, press release 2026-2027/1341, 16 October 2026.
7. RBI. Consolidation of regulatory instructions into Master Directions. Press release 2025-2026/1588, 28 November 2025.
8. RBI. Directions on Asset Classification, Provisioning and Income Recognition for Commercial Banks, press release 2026-2027/150; and Final Directions on Basel III Capital Charge for Credit Risk under the Standardised Approach, press release 2026-2027/149; both 27 April 2026.
9. RBI. 2025 list of Domestic Systemically Important Banks. Press release, 2 December 2025; and Upper Layer NBFCs 2026-27, press release 2026-2027/823, 6 August 2026.
10. RBI. Withdrawal of Rs 2000 Denomination Banknotes: Status. Press release 2026-2027/190, 1 May 2026.
11. RBI. Frequently Asked Questions on the Reserve Bank - Integrated Ombudsman Scheme 2026.
12. CBDT Circular No. 32 of 2019, 30 December 2019; and Department of Financial Services, FAQs on Merchant Discount Rate on Select UPI (P2M) Transactions, 15 September 2026.