Highlights of RBI Annual Report 2025-26 – Chapter 4 & 5

Reserve Bank of India (RBI) has published its annual report for the financial year 2025-26. In a series of articles, we will go through the highlights of the report. This is the second article in the series. 

Chapter 4 – Credit Delivery and Financial Inclusion

• The limit for collateral free loans to Micro and Small Enterprises (MSEs) was enhanced from ₹10 lakh to ₹20 lakh.
• The RBI was involved with the nationwide campaign, ‘Aapki Poonji, Aapka Adhikar’ (Your Money, Your Right), conducted during October-December 2025 to facilitate the return of unclaimed deposits and timely settlement of eligible claims from the Depositor Education and Awareness (DEA) Fund. During the campaign, ₹2,876 crore of unclaimed deposits were settled by public sector banks and regional rural banks.
• Expanding and Deepening of Digital Payments Ecosystem (EDDPE) programme 
• The programme aims to provide every eligible individual in the identified districts at least one mode of digital payment, viz., debit / RuPay cards, net banking, mobile banking, Unified Payments Interface (UPI), unstructured supplementary service data (USSD), Aadhaar enabled payment system (AePS), etc. 
• The programme was extended to all districts [except 2 districts of union territory (UT) of Andaman & Nicobar Islands]. 
• As on March 31, 2026, 100% coverage has been achieved in more than 80% districts (710 districts), which includes all districts in 22 states and 8 UTs. 
• Financial Inclusion Index (FI-Index) 
• The RBI has developed a composite FI-Index comprising 3 sub-indices (viz., access, usage and quality) to assess the extent of financial inclusion in the country. 
• Based on data from banking, investment, insurance, postal and pension sectors, the FI-Index improved to 67 in March 2025 from 64.2 in March 2024, with gains across all dimensions, led by usage and quality.
• Financial Literacy Week (FLW) 2026, an annual initiative of the RBI, was observed during February 9 - 13, 2026 on the theme ‘KYC - Your first step to safe banking’ to promote awareness among the public on the importance of KYC and account discipline. 
• National Strategy for Financial Inclusion (NSFI):2025-30
• NSFI:2025-30, approved by the Financial Stability and Development Council – Sub-Committee (FSDC-SC), was released on December 1, 2025.
• The strategy lays down 5 strategic objectives (Panch-Jyoti) towards elevating the state of financial inclusion in the country and a menu of 47 action points to achieve them. The Panch-Jyoti includes the following –
• Improving the availability and use of an equitable, responsible, suitable, and affordable bouquet of financial services to achieve financial safety and financial security for households and micro enterprises.
• Adopting a gender-sensitive approach for women-led financial inclusion and differentiated strategies for improving financial resilience of households, especially for the underserved and vulnerable segments.
• Synergising livelihood, skill development and support ecosystem and their linkages with financial inclusion.
• Leveraging financial education as a tool for promoting financial discipline.
• Strengthening the quality and reliability of customer protection and grievance redressal measures.
• The focus of the recommendations is on enhancing the usage and quality dimensions of financial inclusion, while improving last mile access and ensuring effectiveness and granularity in the monitoring and measurement mechanism. 
• The strategy has been framed under the aegis of the Technical Group on Financial Inclusion and Financial Literacy (TGFIFL).
• Banks’ progress in financial inclusion is monitored through the Monitoring Progress of Financial Inclusion (MPFI) Return.
• At present, 12 public sector banks and 2 private sector banks (Jammu & Kashmir Bank and ICICI Bank) have been assigned lead bank responsibilities, covering 778 districts across the country.
• The continuation of the modified interest subvention scheme (MISS) for short term loans to agriculture and allied activities availed through kisan credit card (KCC) during 2025-26 was notified.

Chapter 5 – Financial Markets and Foreign Exchange Management

• Use of Indian Rupees (INR) and local currencies for cross-border trade – 
• Persons Resident Outside India (PROIs) maintaining a Special Rupee Vostro Account (SRVA) for international trade settlement in INR were permitted to invest their rupee surplus balance held in SRVA in –
• Central government securities (including treasury bills) 
• Non-convertible debentures / bonds and commercial papers issued by an Indian company
• Authorised Dealer (AD) banks were permitted to open SRVAs of overseas correspondent banks without referring to the RBI for approval.
• AD banks, including their branches outside India, were permitted to lend in INR to PROIs which are resident of Nepal, Bhutan, or Sri Lanka, including a bank in these jurisdictions, for cross-border trade transactions.
• Local currency arrangements (LCAs) were made with partner countries which entail invoicing / settlement of cross-border trade in either INR or the trade partner’s local currency. As of May 2026, LCAs have been entered into with 4 jurisdictions (the UAE, Indonesia, the Maldives and Mauritius) and SRVAs have been opened by correspondent banks in 35 partner countries.
• PROIs were permitted to open and maintain INR-denominated accounts with branches of AD banks outside India for all permissible current and capital account transactions with Persons Resident in India (PRIs) and all bona fide transactions with other PROIs.
• Transfer of funds, for all bona fide transactions, was permitted between repatriable Rupee accounts. 
• Standalone Primary Dealers (SPDs) authorised as AD Category III, were permitted to transact in Non-Deliverable Derivative Contract (NDDC) involving the INR.
• Municipal debt securities were included as eligible securities for repo transactions. 
• Unique transaction identifier (UTI) was mandated for all transactions in over-the-counter (OTC) derivative markets.
• To curb undue volatility in INR, the ADs were mandated to maintain their net open positions involving INR (NOP-INR) in the onshore deliverable market within US$ 100 million at the end of each business day, effective April 10, 2026.
• The RBI intervened in the forex market through operations in the onshore / offshore OTC and exchange traded currency derivatives segments to contain excessive volatility in the exchange rate.
• Exporters were allowed to realise and repatriate full export proceeds of goods exported to Bharat Mart (a multimodal logistics network-based marketplace in the UAE) within 9 months from the date of sale of goods from the warehouse. They were also permitted to open / hire warehouses and remit funds for initial as well as recurring expenses to set-up and continue business operations of its offices.
• Time period for realisation and repatriation of full export value of goods / software / services exported from India was extended from 9 months to 15 months, from the date of export from India.
• Time period for shipment of goods was extended from 1 year to 3 years from the date of receipt of advance payment (for exports) or as per agreement, whichever is later.
• Indian exporters were permitted to repatriate unutilised funds, after adjusting for forward commitments, from the date of receipt in the foreign currency account opened with banks outside India, within – 
• 3 months (previously 1 month) in case of accounts maintained with banks in an international financial services centre (IFSC).
• Next month for all other jurisdictions.
• Importers were permitted to make advance remittance for import of shipping vessel, without bank guarantee or an unconditional, irrevocable standby letter of credit, up to US$ 50 million.
• Tugs, tugboats, dredgers, and vessels going out of India for providing offshore support services were exempted from filing export declaration.
• The time period for outlay of foreign exchange in case of merchanting trade transactions (MTTs) was increased from 4 to 6 months.
• To facilitate timely closure of entries in Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS); and to reduce compliance burden on small exporters and importers, AD banks were advised to –
• Reconcile and close entries (including outstanding entries) in EDPMS and IDPMS portals, of value equivalent to ₹10 lakh per entry / bill or less, based on a declaration provided by the concerned exporter that the amount has been realised or by the importer that the amount has been paid.
• Accept any reduction in declared value or invoice value of the shipping bills / bills of entry, based on declaration by concerned exporter or importer.
• Review charges levied for handling these small-value export and import transactions and ensure that the same are commensurate with the services rendered and to not levy any penal charges (penalty) for delays in adherence to any regulatory guidelines.
• The guidelines were issued for levying a smaller amount for compounding of contraventions in exceptional circumstances. Consequently, the compounding authority was allowed to cap the amount imposed (per rule / regulation contravened) at ₹2,00,000 for such cases.
• The criterion for track record in import / export of diamonds / coloured gemstones / diamond and coloured gemstones studded jewellery / plain gold jewellery was increased from 2 to 3 years for opening and maintenance of Diamond Dollar Accounts.
• Government of India notified that an Indian company engaged in a sector or activity prohibited for foreign direct investment (FDI) may issue bonus shares to its pre-existing shareholders who are PROIs provided that the shareholding pattern of such shareholders does not change pursuant to such issuance.
• A person, not being a citizen of Pakistan or Bangladesh, was permitted to –
• Take / send out of India to Nepal or Bhutan, and bring into India from Nepal or Bhutan, currency notes of Government of India and RBI notes in denominations up to ₹100 without any limit.
• Take out of India to Nepal or Bhutan, and bring into India from Nepal or Bhutan, notes of denominations above ₹100 up to a total limit of ₹25,000.
• FX-Retail was linked with Bharat Connect and in the first phase, purchase of US dollars by individuals has been facilitated.
• Investments under the Voluntary Retention Route (VRR) shall be reckoned under the investment limit for Foreign Portfolio Investor (FPI) under the general route; and FPIs that have availed retention periods longer than the minimum retention period shall have the option of liquidating their portfolio, fully or partly, and exiting the VRR after the end of the minimum retention period.
• Trading and guaranteed settlement facilities were introduced for forex forward contracts of tenors up to 36 months (from 13 months). 
• To electronify non-resident trades in government securities, a provision was made to connect negotiated dealing system–order matching (NDS-OM), the anonymous order matching platform for government securities, with global bond trading platforms. 
• Based on the recommendations of the Working Group for the review of trading and settlement timings in financial markets regulated by the RBI (Chair: Shri Radha Shyam Ratho, Executive Director, RBI), the timings of both the collateralised and uncollateralised segments of the money market were extended.
• Fixed Income Money Market and Derivatives Association of India (FIMMDA) was granted recognition as a self-regulatory organisation (SRO) in financial markets.
• The secured overnight Rupee rate (SORR) - a benchmark based on secured money markets [basket repo and triparty repo (TREP)] - was authorised. Financial Benchmarks of India Private Limited (FBIL) commenced the publication of the SORR benchmark with effect from July 7, 2025.
• FBIL was authorised to publish reference rates in the currencies of India’s major trading partners. FBIL commenced the publication of additional reference rates with effect from January 5, 2026.
• Instances of issuance of partly paid units (PPUs) to PROIs by investment vehicles in India prior to their enablement with effect from March 2024, were permitted to be regularised through compounding, subject to completion of requisite administrative action including reporting thereof by alternative investment funds (AIFs). Accordingly, it was clarified in May 2025 that investment vehicles may report pre-circular issuances of PPUs within 180 days from the date of said clarification. The 30-day reporting timeline, however, continues for post-circular issuances of PPUs by investment vehicles.

References

Reserve Bank of India. (2026, May 29). 'RBI Annual Report 2025-26'. Retrieved from https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?year=2026

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