RBI Bulletin Mar 2026

 

Good Finance, Good Leadership: On the Road to Viksit Bharat@2047

Shri Swaminathan J.

Prof Nitin Upadhyay, Dean of Academics; Prof Jabir Ali, Dean of Faculty and Research; Prof Pranab Das and Dr. Ashish Kumar, Conference Chairs of this event; Distinguished speakers, panelists and guests; Faculty members, and above all, my dear students. A very good morning to all of you.

Before I begin, let me say it is a pleasure and privilege to be at IIM Jammu, one of the youngest IIMs. In a short span, it has built momentum as a premier academic institution, and conferences like IFAC are part of that journey—bringing together faculty, students, and practitioners to engage with real questions in finance and accounting.

The theme this year is ambitious and important: financial strategies for inclusive and sustainable economic growth to achieve Viksit Bharat@2047. It is a theme that belongs not only in policy papers and boardrooms, but also in classrooms, because it is ultimately about how lives improve over time.

Since the audience today includes many young MBA students, I want to speak less like a regulator and more like someone speaking to future leaders. Imagine it is your first job and your first salary hits your account. You have choices. You can spend it. You can save it. Or you can invest it. Now pause and ask yourself: before you do any of these three, what are the few things that you want from the financial system?

• Safety, so that your money is secure even when conditions become difficult.
• Fairness, so that products are not designed or sold in a way that exploits information gaps.
• Reliability, so that services work smoothly in daily life, and if something goes wrong, it gets resolved without running from pillar to post.

These three assurances are not only personal preferences. They are also a useful way to think about the kind of financial system India needs as we move towards 2047.

Apart from big numbers like GDP or GDP per capita, development is also about the quality of daily life: better jobs, stronger households, safer financial choices, and resilience when shocks occur. It is about whether growth feels real, broad-based and inclusive.

Finance will have to play a pivotal role in this transformation. It will have to mobilise savings, allocate capital, and manage risk. Done well, it will support enterprises and households across the country.

So, the first-salary question is not just a thought experiment. Over the next two decades, many decisions that will shape India’s financial system will be taken by people like you — in Banks and NBFCs, fintechs and payment firms, audit and consulting, corporate finance and treasury, start-ups, and in Government and public institutions.

India of 2047 will not be shaped only by technology or capital. It will be shaped by leadership of young students like you.

Leadership in finance is not just about intelligence. It is about judgement. It is about discipline. It is about what you choose to reward, what you choose to question, and what you choose to fix early.

When people think about finance, they often imagine numbers, models, and markets. These things matter. But finance is, at its core, a people business. Behind every deposit is a household trying to be secure. Behind every loan is an ambition to grow. Behind every insurance policy is a fear of uncertainty. Behind every fraud is a moment of vulnerability. Behind every failure of controls is a real loss borne by someone who did not fully understand the risk. If you remember that, you will become a better finance professional and a better leader.

Since this is a finance and accounting conference, let me add one more point. Finance needs numbers, but more importantly, it also needs integrity in numbers. In the age of dashboards and AI, it is easy to forget that accounting is a discipline of clarity. It forces us to recognise losses, admit uncertainty, value assets prudently, and explain performance in a way that others can rely on. In many organisations, the true difference between a good institution and a weak one is not how fast it grows, but how truthfully it measures itself.

I want to offer you a “career compass” in three parts. These are not technical rules. They are a few lessons that my own journey in banking has taught me, often the hard way. If you keep these in mind, I believe your decisions will be sound, and your leadership will be enduring.

1. Respect the customer First part of the compass is to respect the customer. In the long run, customer outcomes are the strongest business strategy. They reduce disputes, lower reputational risk, and sustain participation in formal finance.

Many problems in finance start small, sometimes, quite literally, in the ‘small print’. A fee not explained clearly; A clause buried in the terms; A loan that is easy to take but hard to repay; or A product sold to meet a target, not to meet a need. Over time, these small problems become big issues. They show up as complaints, disputes, defaults, and customer harm. Therefore, we should endeavour to design and sell products that are suitable, transparent, and fair. The best leaders prevent harm before it occurs. They do not wait for problems to become headlines.

2. Respect the financials Second part is to respect the financials. The financial statements tells you what is sustainable and what is not. It tells you whether you are building strength, or simply postponing risk. Look beyond profits to the quality of assets, the stability of funding, the adequacy of buffers, and the concentration of exposures. Strength is built in good times and revealed in stress.

When times are good, you will always find reasons to relax discipline. Competition is intense. Targets are high. Growth looks easy. Risk appears distant. That is exactly when leadership matters the most. The best leaders use good times to build buffers, improve controls, and strengthen governance. They ask uncomfortable questions when everyone else is celebrating.

3. Respect governance The third and last part of your career compass is to respect governance. Many failures in finance are not failures of knowledge. They are failures of governance. People knew what was going wrong, but they did not speak up. Or they spoke up, but no one listened. Or everyone noticed red flags, but incentives pushed them to look away.

As leaders you should endeavour to build systems where growth, risk, and conduct are aligned. Encourage effective challenge. Reward the right behaviours because ultimately what gets rewarded gets repeated. Foster an environment where teams can raise concerns without fear, where risks are discussed honestly, where numbers are not forced to look good.

Now let me translate this compass into a few practical habits you can use early in your career.

Ask better questions Many people ask, “How fast are we growing?” A better question is, “What could break?”

• Ask, “What assumptions are we making, and what happens if they go wrong?”
• Ask, “What happens if the customer’s cash flows fall?”
• Ask, “What happens if the system is down for a day?”
• Ask, “What happens if a third-party service provider faces an outage?”
• Ask, “What happens if fraud spikes in a new channel?”

These questions are not the mark of a pessimistic ‘doubting Thomas’; they are the risk-sensitive questions, mark of a prudent leader. One of the most valuable skills in finance is not giving answers. It is asking the right questions at the right time.

Communicate simply A leader who cannot explain a product, a risk, or a decision in simple language often does not understand it deeply enough. Complexity is sometimes necessary, but confusion is not. Whether you work in credit, markets, compliance, audit, or fintech, your ability to explain clearly will be a major advantage.

Choose the long term over the easy short term There will be moments where the easy path is tempting. A shortcut in due diligence; A small compromise on disclosure; A “temporary” relaxation of standards; or A target that encourages aggressive sales. These compromises may look small in the moment, but they compound. In finance, small compromises can become large losses.

Now let me connect this back to the national agenda of Viksit Bharat@2047. India’s next phase of growth will require three things to happen together.

• We need a steady flow of capital into productive areas that create jobs and capabilities.
• We need inclusion that is meaningful, where people and small enterprises can use finance safely, not just access it.
• And we need customer outcomes to remain fair as finance becomes more digital and more data-driven.

This is where your generation will be tested, because your generation will work in an environment where everything scales quickly. A product can reach ten million people within months. A credit model can approve loans in seconds. A payments platform can process massive volumes.

This scale is powerful, but it also means that harm can scale quickly if design is poor, controls are weak, or incentives are misaligned. Therefore, in finance, speed is not always a virtue. Sometimes speed hides weakness. Technology is a force multiplier. It amplifies good design as well as bad design. Eventually, the future will reward institutions that can combine efficiency and innovation with prudence, and growth with resilience.

Conclusion Let me conclude by emphasising that the journey to Viksit Bharat@2047 is a collective endeavour. It will require sound institutions that can support growth through cycles; inclusion that improves real outcomes for households and enterprises; and customer protection that keeps pace with innovation.

If we align capital with capability, innovation with safeguards, and inclusion with well-being, the aspiration of 2047 will steadily become a lived reality for millions. It will call for leaders who can combine performance with principles, and ambition with discipline.

Before I close, my sincere thanks to the Director, faculty, staff and student team of IIM Jammu for the effort that has gone into organising IFAC 2026. Platforms like these help connect classroom learning with the realities of life, and they sharpen the judgement that future leaders will need.

With this I wish you a very engaging and insightful conference. Jai Hind.

Perspectives on India’s Growth: Last Four Decades to the Present

Dr. Poonam Gupta

It is my pleasure and honour to deliver the 14th Foundation Day Lecture of the Centre for Development Studies (CDS). Established in October 1970 by Professor K. N. Raj, CDS has been a premier academic institute in India for social science and development research, with a pioneering footprint in economic research on human development, labour, industry, international trade, migration, and local governance.

The topic for my talk today focuses on some of the salient features of India’s economic growth in recent years and how they may be contextualised over the past four decades. I focus on three defining features of India’s growth trajectory: first, its sustained momentum and gradual acceleration; second, the coexistence of rapid expansion with macroeconomic stability; and third, a demonstrated resilience reflected in increasingly stable and predictable economic outcomes.

1. Economic growth has accelerated slowly but surely

Looking at the pace of economic growth since the 1980s, the Indian economy has slowly but surely accelerated at an average pace of 0.03 percentage points a year during the past four and a half decades. While the growth rate averaged 5.7 per cent during the 1980s, it improved to 5.8 per cent in the 1990s, to 6.3 and 6.6 per cent during the 2000s and 2010s respectively, and further to 7.7 per cent during the last four years (excluding COVID years). Ten-year rolling averages of annual GDP growth rate confirm this trend acceleration and show that there have not been any periods of prolonged stagnation or secular decline.

The acceleration in per capita income growth has been even faster. From a modest level of US$ 274 in 1981, India’s per capita income has increased nearly tenfold to about US$ 2700 in 2024. While it took about 23 years from 1981 to double per capita income, it has increased almost five-fold in the subsequent 22 years. IMF projections suggest it will increase to US$ 4346 by 2030.

A significant contributing factor has been the decline in population growth. India’s population growth rate has declined faster than the global rate and has been at par with the world average since about 2014. While death rates have fallen, the decline in fertility rates since the 1980s has been even faster, resulting in slowing population growth even as the working-age population share continues to increase.

Since the early 1990s, India has grown much faster than the rest of the world, with its share of the global economy increasing three times from 1.1 per cent in 1991 to 3.5 per cent in 2024. India’s per capita GDP as a percentage of world per capita GDP has also increased from 7 per cent to close to 20 per cent over the same period. Regression analysis shows that this acceleration is specific to India and was not witnessed at an aggregate level by seven other major emerging economies (the EM7).

2. Indian economy has experienced a virtuous cycle of accelerated growth and macroeconomic stability

Macroeconomic stability is typically assessed through outcomes like inflation, deficits, and financial sector health, all of which have remained in a healthy range for India with notable recent improvements.

• Inflation: Average annual CPI inflation has moderated and become more stable, declining from close to 10 per cent in the 1990s to below 5 per cent in the last four years under the flexible inflation targeting (FIT) regime.
• Current Account: India’s decadal average current account deficit (CAD) has varied within a moderate range of 0.5-2.2 per cent of GDP since 1990, halving to about 0.75 per cent in the last six years. This resilience is supported by diversified inflows, particularly services exports and remittances.
• Fiscal Discipline: Institutionalised through the FRBM Act, 2003, fiscal management has helped build resilience. Even though public debt is higher than in many countries, it is sustainable because a large part is held domestically, in long tenors, and denominated in local currency. Following COVID-19, fiscal policy shifted back to consolidation by 2022, accompanied by a dramatic increase in capital expenditure and signs of improved direct tax collection.
• Banking Health: After a decade of balance sheet repair, Indian banks are in a structurally stronger position. Capital positions are robust, with the Capital to Risk-Weighted Assets Ratio at 17.2 per cent in September 2025, and asset quality is at multi-year highs with the GNPA ratio declining to 2.1 per cent.

3. Economic outcomes have become less fickle and more predictable

Economic outcomes now materialize within a narrower range, indicating enhanced stability. Agriculture has seen improved growth and reduced volatility since 2010, and Services, the main supply-side driver, has experienced distinctly lower volatility.

This reduced volatility stems from the economy becoming more resilient to known shocks. The negative correlation between agriculture and rainfall deviation has weakened significantly due to crop diversification, expanded irrigation, and better weather information. Furthermore, the economy is more insulated from global oil prices as the oil intensity of GDP has declined consistently, a trend expected to persist as India transitions toward renewable energy.

Policy frameworks have evolved to reflect global best practices adapted to domestic realities, including rule-based fiscal consolidation, GST reforms, and flexible inflation targeting. These frameworks, along with cushions built during quiet times, allow the government and RBI to respond promptly to shocks like reversals of external capital flows, further insulating the real economy.

4. Conclusion

High, stable, and accelerating growth, along with predictable economic outcomes, have become the hallmarks of the Indian economy. With its macroeconomic stability, policy consistency, and diversified demand and production bases, the Indian economy is assured of a continuously improving economic trajectory. This contrasts with the more modest promise of many other emerging and developing economies that lack one or more of these enabling factors.

No. 19: Consumer Price Index (Base: 2024=100)

Group/Sub group	2025* Rural	2025* Urban	2025* Combined	Rural Feb. 25	Rural Jan. 26	Rural Feb. 26 (P)	Urban Feb. 25	Urban Jan. 26	Urban Feb. 26 (P)	Combined Feb. 25	Combined Jan. 26	Combined Feb. 26 (P)
1. Food and beverages	102.3	102.9	102.5	100.4	103.9	103.8	100.6	104.3	104.0	100.5	104.0	103.9
2. Paan, tobacco and intoxicants	103.1	102.8	103.0	101.9	104.4	105.4	101.8	104.4	105.4	101.9	104.4	105.4
3. Clothing and footwear	105.0	103.9	104.6	103.5	106.6	106.8	102.8	104.8	105.0	103.2	105.9	106.1
4. Housing, water, electricity, gas and other fuels	101.6	101.2	101.3	100.8	102.1	102.2	100.4	101.9	102.0	100.6	102.0	102.1
5. Furnishings, household equipment and routine household maintenance	102.5	102.4	102.4	101.7	103.1	103.3	101.7	102.8	102.9	101.7	103.0	103.1
6. Health	102.8	103.3	103.0	101.8	103.7	103.6	102.2	104.2	104.3	102.0	103.9	103.9
7. Transport	100.9	100.8	100.8	100.8	100.7	100.7	100.7	100.6	100.7	100.7	100.6	100.7
8. Information and communication	103.5	103.1	103.4	103.3	103.6	103.7	102.9	103.0	103.1	103.1	103.3	103.4
9. Recreation, sport and culture	102.7	102.6	102.7	102.0	103.8	104.1	101.8	104.2	104.3	101.9	104.0	104.2
10. Education services	103.4	104.1	103.8	101.7	104.8	104.8	102.1	105.7	105.7	102.0	105.3	105.4
11. Restaurants and accommodation services	103.8	104.7	104.3	103.0	104.8	105.1	103.3	106.6	106.8	103.2	105.7	106.0
12. Personal care, social protection and miscellaneous goods and services	108.2	108.4	108.3	103.9	123.1	125.2	104.2	122.1	123.4	104.0	122.7	124.5
All India General CPI	102.8	102.7	102.8	101.3	104.6	104.7	101.3	104.3	104.4	101.3	104.5	104.6

Notes:

• P: Provisional.
• ‘*’: Arithmetic mean of all monthly indices of calendar year 2025.
• Source: National Statistical Office, Ministry of Statistics and Programme Implementation, Government of India.

Digitalisation for Inclusive Finance and Sustainability: Priorities for the Next Phase

Shri Swaminathan J.

Professor Partha Ray, Director, National Institute of Bank Management (NIBM), Shri Jaikish, Principal, College of Agricultural Banking (CAB), distinguished delegates, researchers, faculty, policymakers, industry leaders, colleagues from India and overseas, ladies and gentlemen. Good afternoon.

As we come to the close of this International Conference on Digitalisation for Inclusive Finance and Sustainability, let me begin by congratulating CAB and NIBM for convening an important conversation at the right time. I am sure the participation over the last two days has been strong, and the discussions have been both forward-looking and grounded in practical realities.

As I reviewed the papers presented, one message came through clearly. Digitalisation is not a goal by itself; it is a means. The real question is: how do we use digital tools to deliver financial services that are accessible, affordable, safe, and useful, while also supporting sustainability and resilience? Against this backdrop, I would like to reflect on three shifts shaping this landscape, then underline what I would call the confidence architecture needed for digital finance at scale, and finally offer a few closing priorities for the road ahead.

From access to capability and confidence

The first shift is in how we look at inclusion. For a long time, access meant inclusion, but the next phase of that is about something deeper: capability and confidence. Inclusion becomes meaningful when households and small businesses can use financial products and payment rails regularly and safely.

Indeed, many discussions in the papers presented here highlight the idea that barriers to inclusion are not only physical; they can also be informational and behavioural. People may have connectivity but lack confidence. They may have access but not agency. They may have a digital tool but not the ability to resolve a problem.

This is why design matters. Effective inclusion solutions often look simple on the surface, but they are thoughtfully engineered underneath. They use plain language, work in low bandwidth settings, and allow assisted journeys. They respect the realities of irregular incomes and modest savings.

A special dimension of capability is the gender gap in digital finance. Bridging this gap is not about devices and connectivity; it requires building women’s digital and financial skills and improving safety and privacy further in digital journeys. If we want digital inclusion to endure, products and processes must be designed around these realities.

From faster finance to fair finance

The second shift is about digital credit and digital intermediation. Digital lending and platform-based models have expanded quickly because they offer speed and convenience. That is a real benefit, but credit is not like any other routine transaction. Credit can strengthen livelihoods, but if poorly underwritten, it can also deepen distress through over-indebtedness.

The discussions here highlighted a central point: the next phase of digital credit must be not only fast, but fair, transparent, and affordable. A related theme is the growing role of data and algorithmic rule engines in credit decisions. Data can reduce frictions and widen access, but it also brings up some important questions: Are we pricing risk, or pricing vulnerability? Are decisions explainable in plain language? Are models being monitored for bias and drift? These questions shape customer confidence, market discipline, and the credibility of the digital finance ecosystem.

From sustainability as a separate agenda to sustainability as core resilience

The third shift is the assimilation of sustainability into mainstream finance. Sustainability is sometimes treated as a specialised product line or a reporting exercise. As climate and environmental risks do translate into financial risks, especially for climate-sensitive sectors and regions, sustainability has to be integral to our products and processes.

At the same time, digitalisation offers tools to strengthen resilience. Better data can improve risk understanding, more responsive credit can support adaptation investments, and digital monitoring can improve transparency and reduce the cost of compliance and reporting. But we should also be realistic: sustainability outcomes require more than digital tools. They require sound institutions, robust capital, and good governance. Digital transformation can enable, but it cannot substitute for the fundamentals.

Confidence architecture is the next frontier

If you bring these three shifts together you will see that the next frontier is not simply building more digital finance; it is building digital finance that people can rely on. This calls for an ecosystem with strong foundations, with four key elements:

1. Security and resilience: As participation scales up, vulnerabilities also scale up. We must invest continuously in cyber security, fraud prevention, incident response, and business continuity. Confidence is built through reliability in ordinary times, and through competence and clarity when disruptions occur.
2. Accountability and effective redress: When a customer is harmed in a digital journey, they should not be passed from one entity to another. Responsibility must be clear, and grievance redress should be simple, time-bound, and effective. A system earns confidence when people experience that help is real, accessible, and fair.
3. Data discipline and meaningful consent: Digital finance runs on data, but data must be handled with discipline: purpose limitation, minimum necessary collection, secure storage, and transparent sharing. Consent must be meaningful, not hidden in fine print.
4. Inclusion with dignity: Inclusion is not only onboarding; it is ongoing service. It is also language, appropriate accessibility and respectful treatment. It is designing for the person who is least comfortable with technology, not only for the person who is most fluent.

Before I turn to the closing priorities, let me briefly underline the critical contribution of digital public infrastructure and interoperability. When core rails are resilient, widely usable, and interoperable, they reduce the cost of reaching the last mile and allow providers to compete on service quality rather than on customer lock-in. They also make it easier to deliver targeted support at scale. However, the wider the rails, the higher the responsibility. Strong governance is essential, including clear standards, reliable uptime, and proportionate safeguards.

Closing: Five priorities going forward

Permit me to close with five practical priorities that can help digitalisation deliver inclusion and sustainability:

• First, build for outcomes, not optics. We should track adoption, but our focus should remain on what matters: active use, reliability, affordability, customer wellbeing, and resilience.
• Second, design for the last user. If the journey works for the most constrained user, it will work for everyone. Simple interfaces, low-data design, and clear grievance pathways should be treated as core features.
• Third, make fairness non-negotiable. Innovation is welcome, but fairness is essential. Transparent pricing, explainable decisions, and respectful collections should all be built into digital credit models.
• Fourth, treat resilience as a design requirement. Operational resilience and cybersecurity are not mere compliance items; they are integral to service quality.
• Fifth, collaborate. Digital finance and sustainability sit at the intersection of regulation, technology, business incentives, and human behaviour. Progress requires collaboration across regulators, financial institutions, fintechs, researchers, and civil society.

Conclusion

In conclusion, digitalisation increases reach and speed, but it also increases vulnerabilities. The task before us, therefore, is to ensure that digital finance scales what is good: inclusion that is usable, innovation that is responsible, and finance that supports resilience and sustainability.

On behalf of the Reserve Bank of India, I thank CAB and NIBM for hosting this conference, and I thank all participants for contributing to a meaningful and constructive dialogue. I hope the ideas discussed here translate into safer rails, better products, and more sustainable outcomes for our citizens and our economy.

Thank you. Jai Hind.

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* Valedictory Address by Shri Swaminathan J, Deputy Governor, Reserve Bank of India at the CAB–NIBM International Conference on Digitalisation for Inclusive Finance and Sustainability, in Pune on March 6, 2026.