The RBI Bulletin September 2026 said the Indian economy grew 7.8% in the first quarter of 2026-27 despite renewed geopolitical tensions in West Asia and higher energy prices. The Reserve Bank of India also reported that foreign exchange reserves reached an all-time high during the period.
The September issue of the monthly bulletin contains seven speeches, three articles and current statistics. The three articles cover the state of the economy, the credit-deposit ratio and private corporate investment.
India economy shows resilience amid global volatility
According to the RBI’s State of the Economy article, economic activity remained resilient through August, supported by high-frequency indicators. Strong export growth helped narrow India’s merchandise trade deficit.
Headline inflation increased to 4.8% in August. The rise was driven by the food and beverages group, along with an increase in fuel and core components.
System liquidity surplus also increased sharply following flows into FCNR(B) deposits. The external sector remained supported by a moderate current account deficit in Q1:2026-27 and strong foreign direct investment flows.
RBI examines credit-deposit gap
A separate article by Saurabh Ghosh, Prabhat Kumar, Madhuresh Kumar and Monica examined the rise in India’s credit-deposit (CD) ratio. Since FY2023, bank credit growth has generally exceeded aggregate deposit growth, taking the CD ratio above 80%.
The authors said deposits do not necessarily have to be mobilised before banks create credit in the modern monetary system. They found that the CD ratio alone may not be an appropriate measure of funding vulnerability when credit growth is strong.
The rise in the CD ratio at end-March 2026 coincided with economic growth and a sound banking system. The article attributed the higher ratio to liability-side changes, including increased lower-cost borrowings and higher capital, along with changes in asset composition that supported credit flows.
Private corporate investment remains strong
The RBI’s third article examined private corporate investment during 2025-26 and its outlook for 2026-27. The total cost and number of projects sanctioned by banks and financial institutions increased during 2025-26 compared with the previous year.
Infrastructure continued to receive the largest share of planned capital investment, led by the power sector. The phasing plans also showed higher intended private-sector capex in 2025-26.
For 2026-27, the pipeline of projects across all financing channels indicates envisaged private corporate capex of Rs 3.2 lakh crore, pointing to continued investment momentum.
The RBI noted that the views expressed in the Bulletin articles are those of the respective authors and do not represent the views of the Reserve Bank of India.
Q1. What did the RBI Bulletin September 2026 say about India’s economic growth?
The RBI Bulletin reported that India’s economy grew 7.8% in Q1:2026-27 despite renewed geopolitical tensions and global financial-market volatility.
Q2. What was India’s headline inflation in August 2026?
Headline inflation increased to 4.8% in August, driven by food and beverages, fuel and core components.
Q3. Why did the RBI examine India’s credit-deposit ratio?
The RBI examined the ratio because bank credit growth has outpaced aggregate deposit growth since FY2023, taking the CD ratio above 80%.
Q4. How much private corporate capex is envisaged for 2026-27?
The phasing profile of pipeline projects indicates envisaged private corporate capex of Rs 3.2 lakh crore in 2026-27.
Q5. Which sector attracted the largest share of envisaged private corporate investment?
The infrastructure sector attracted the largest share, with the power sector leading within infrastructure.
