Highlights of RBI Annual Report 2025-26 – Chapter 7 to 12

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 fifth and final article in the series. 

Chapter 7 – Public Debt Management

• The ways and means advances (WMA) limit for the Government of India (GoI) for H1:2025-26 (April to September 2025) was fixed at ₹1,50,000 crore and for H2:2025-26 (October 2025 to March 2026) was fixed at ₹50,000 crore.
• The RBI entered into an agreement with the Government of National Capital Territory of Delhi (GNCTD), under Section 21A(1) of the RBI Act, 1934, to carry on the general banking business of GNCTD and manage its rupee public debt.
• The WMA limit of GNCTD was set at ₹890 crore, taking the aggregate WMA limit of all the states / UTs to ₹61,008 crore.
• The RBI introduced Separate Trading of Registered Interest and Principal of Securities (STRIPS) in the state government securities.
• Retail Direct Gilt (RDG) account –
• An auto-bidding facility for treasury bills (T-Bills), covering both investment and re-investment options was enabled in the RDG account, which would help investors mandate automatic placement of bids in primary auction of T-Bills.
• Seamless value-free on-own-account transfer was facilitated for Government Securities (G-secs) held by retail investors between the RDG accounts and demat accounts maintained with Securities and Exchange Board of India (SEBI) regulated depositories [National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL)].
• Benchmark Issuance Strategy (BIS) –
• The RBI has been sensitising states about the adoption of BIS for their market borrowings, for improving the transparency and providing greater clarity to investors. 
• This strategy would involve issuing securities in specific benchmark tenor buckets as per the pre-announced calendar. 
• Based on the concurrence received from state governments, it was decided to introduce the BIS, on a pilot basis for 9 state governments starting from 2026-27.
• Medium-term debt management strategy (MTDS) –
• The RBI has been encouraging states to adopt MTDS that would essentially cover development of a prudent debt management strategy consistent with government’s preferences for cost / risk trade-offs. 
• MTDS involves comprehensive assessment of the existing debt portfolio, evaluation of its composition (internal versus external, short-term versus long-term), debt servicing profiles, and vulnerabilities. 
• The strategy prescribes adjustments to debt composition, modifying instrument structures to address identified risks and ensure fiscal sustainability.

Chapter 8 – Currency Management

• All banks and White Label ATM Operators (WLAOs) were mandated to ensure that their Automated Teller Machines (ATMs) dispense ₹100 and / or ₹200 denomination banknotes on a regular basis.
• Indian Currency Microsite (https://indiancurrency.rbi.org.in) was launched, replacing the earlier ‘Paisa Bolta Hai’ microsite. The microsite provides members of the public a platform to access information on Indian banknotes, with a dedicated section for information on exchange of banknotes.
• The service charge levied by Currency Chests (CCs) for deposits made by non-CC branches was enhanced –
• Large modern CCs – increased from ₹8 to ₹11 per 100 pieces
• Other CCs – increased from ₹5 to ₹8 per 100 pieces
• Notes, coins and e₹ in circulation –
• The value and volume of banknotes in circulation increased by 11.9% and 10.5%, respectively, during 2025-26. 
• In volume terms, ₹500 denomination constituted the highest share of the total banknotes in circulation, followed by ₹10 denomination banknotes.
• The total value as well as volume of coins in circulation increased by 11.4% and 4.5%, respectively, during 2025-26. 
• Coins of ₹1, ₹2 and ₹5 together constituted 80.7% of the total volume of coins in circulation, while in value terms, these denominations accounted for 60.2%.
• As on March 31, 2026, the value of e₹ in circulation stood at ₹771.7 crore as against ₹1,016.5 crore as on March 31, 2025.
• Fake Indian Currency Notes (FICNs) –
• During 2025-26, out of the total FICNs detected in the banking sector, 2.4% were detected at the RBI.
• The counterfeit notes detected in the denominations of ₹10, ₹50, ₹100, ₹200 and ₹2000 declined during 2025-26, while those in ₹20 and ₹500 denominations increased by 47.4%, and 20.5%, respectively, as compared with the previous year.
• The scope of services covered under the Citizen’s Charter was reviewed to include services of providing exchange of notes received through Postal Covers, Triple Lock Receptacles (TLRs) and notes that cannot withstand normal handling.
• Anti-bacterial and anti-microbial treatments developed in-house by the banknotes paper mill were integrated into the paper manufacturing process. This has resulted in further improvements in safety and hygiene standards of Indian banknotes.
• During the year, print trials of varnished notes were conducted at the Mysuru printing press of Bharatiya Reserve Bank Note Mudran Private Ltd. (BRBNMPL). 

Chapter 9 – Payment and Settlement Systems and Information Technology

• The directions were issued for streamlining the process for onboarding of Aadhaar Enabled Payment System (AePS) touchpoint operators and strengthening fraud risk management.
• In the directions on Payment Aggregators (PAs), apart from PA-Online and PA-Cross Border (PA-CB) business, PA-Physical was also brought under the regulatory ambit. 
• The RBI issued ‘Payments Vision 2028’ –
• Strategic priorities for digital payments up to December 2028.
• Theme – Shaping India’s Payment Frontier.
• Focuses on – user empowerment, safeguards against fraud, efficiency of cross-border payment frameworks and promoting ease of doing business. 
• To ensure that India’s payment systems remain safe, resilient, inclusive and innovative.
• Unified Payments Interface (UPI) and RuPay cards –
• UPI continued to account for the largest share in retail payments, contributing nearly 86% of total retail payment transactions during the year.
• The acceptance of UPI for QR-code based merchants is operational in Bhutan, France, Mauritius, Nepal, Qatar, Singapore, Sri Lanka, and the UAE. 
• Deployment work of UPI-like infrastructure is ongoing in Namibia and Peru. 
• The RuPay stack deployment for development of a domestic card scheme has been completed in Mauritius and the UAE. 
• Continuous clearing and settlement in Cheque Truncation System (CTS) –
• Continuous clearing and settlement on realisation were implemented in CTS with Phase 1 going live on October 4, 2025. 
• The initiative aims to expedite cheque clearing and reduce settlement risks by enabling continuous processing and faster credit to customer accounts. 
• Under this, cheques are scanned, presented, and passed on a continuous basis during the presentation and confirmation sessions, instead of the batch processing approach followed earlier. 
• Cheques that are positively confirmed or deemed approved are included for settlement, while negatively confirmed (dishonoured) cheques are not.
• Banks are required to credit customer accounts within 1 hour of settlement.
• Previously, cheque inward clearing was handled at 19 regional offices (ROs) of the RBI, each requiring a separate infrastructure. The inward clearing operations were centralised by establishing a service branch at Chennai RO.
• The directions were issued to encourage adoption of new authentication factors. The directions also mandated validation of additional factor authentication (AFA) by card issuers in cross-border card-not-present transactions, whenever requested by overseas merchants or acquirers.
• The initiative to introduce an exclusive ‘.bank.in’ domain marked India as the first country globally to mandate a secure domain for the banking system, thereby strengthening cybersecurity and reducing digital payment frauds. This effort was recognised by Central Banking, London, UK which honoured the RBI with the ‘Initiative of the Year 2026’ award.
• The RBI-Digital Payments Index (RBI-DPI), computed semi-annually, stood at 516.76 for September 2025 as against 493.22 for March 2025.
• A functionality was developed to automate the process of availing standing liquidity facility (SLF) by standalone primary dealers (SPDs).
• Indian Financial Technology and Allied Services (IFTAS) commenced development of the alternate payment system (APS), integrating National Electronic Fund Transfer (NEFT), Real Time Gross Settlement (RTGS), and Structured Financial Messaging System (SFMS), which is currently undergoing functional and performance testing. 
• IFTAS developed the Global SFMS Hub, a secure, ISO 20022 standard-compliant cross-border messaging platform, which is presently in closed user group (CUG) testing with member banks in India and designated central banks of other countries. 
• As technology partner for Clearing Corporation of India Limited International Financial Services Centre (CCIL IFSC) Limited, IFTAS launched the foreign currency settlement system (FCSS), enabling near real-time foreign currency settlement in Gujarat International Finance Tec-City International Financial Services Centre (GIFT-IFSC).

Chapter 10 – Communication, International Relations, Research and Statistics

• India assumed the BRICS Chair in 2026, guided by the theme ‘Building for Resilience, Innovation, Cooperation and Sustainability’.
• G20 Presidency –
• South Africa assumed the G20 Presidency in December 2024, with the overarching theme of ‘Solidarity, Equality, and Sustainability’. 
• The United States assumed the G20 Presidency from December 2025.
• Public awareness campaigns (PACs) by the RBI –
• The RBI launched its official podcast series ‘RBI Talks: From Paisa to Policy’ aimed at simplifying complex financial concepts and enhancing public understanding of monetary and regulatory policies. The series debuted with the episode titled ‘Demystifying Know Your Customer (KYC)’ and is accessible via the RBI’s official YouTube channel and website.
• Under the overarching theme of ‘RBI Kehta Hai… Jaankaar Baniye, Satark Rahiye’, the RBI undertakes multi-lingual PACs to familiarise the public with key regulatory messages and build financial awareness. 
• The RBI’s PACs were also released through WhatsApp. 
• Simplified public awareness messages with the tagline ‘RBI Kehta Hai. Smart Bano, Cool Raho’ continued for creating public awareness.
• Commission paid to Agency Banks (ABs) –
• The RBI pays commission to ABs for conducting Government banking business. The agency commission rates were revised as under –
• Receipts (physical mode) – retained at ₹40 per transaction
• Receipts (e-mode) – increased from ₹9 to ₹12 per transaction
• Pension payments – increased from ₹75 to ₹80 per transaction
• Payments other than pension – increased from 6.5 paisa to 7 paise per ₹100
• Further, it was decided to –
• Review the agency commission rates once in every 3 years.
• Pay the agency commission on all payment transactions handled by ABs, except those which are either pre-funded or where some compensation is paid by the Government to ABs.
• The RBI extended support to Maldives and Bhutan during 2025-26 under the framework on currency swap arrangement for SAARC countries 2024-27.
• Report on Currency and Finance, titled ‘India’s External Sector: Navigating Global Turbulence’, is being prepared.
• Amendments were made to the Banking Regulation Act, 1949 and the RBI Act, 1934, through the Banking Laws (Amendment) Act, 2025.

Chapter 11 – Governance, Human Resources and Organisational Management

• The next medium-term strategy framework (Utkarsh 2029) was formulated for the period April 2026 to March 2029.
• The erstwhile Board for Regulation and Supervision of Payment and Settlement Systems was replaced by the Payments Regulatory Board with effect from May 9, 2025.

Chapter 12 – The Reserve Bank’s Accounts for 2025-26

• The size of the RBI’s balance sheet increased by 20.6% for the year ended March 31, 2026.
• Income for the year increased by 26.4% and expenditure increased by 102.4%. 
• The year ended with an overall surplus of ₹2,86,588.46 crore as against ₹2,68,590.07 crore in the previous year, resulting in an increase of 6.7%. The surplus was transferred to the Central Government.
• The increase on the asset side was due to rise in domestic investments, gold and foreign investments. 
• On the liability side, the expansion was due to increase in revaluation accounts, notes issued, deposits and other liabilities.
• A provision of ₹1,09,379.64 crore was made and transferred to Contingency Fund (CF). No provision was made towards Asset Development Fund (ADF).

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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