The Reserve Bank of India (RBI) released its RBI Bulletin October 2026 today, covering two speeches, four research articles, and current statistics. The bulletin offers important insights into India’s economy, banking sector, and monetary policy transmission.
RBI Bulletin October 2026: State of the Economy
Renewed geopolitical tensions in West Asia have disrupted supply chains and amplified inflationary pressures globally. As a result, major central banks have raised policy rates. Meanwhile, elevated sovereign bond yields in advanced economies have raised fresh concerns about fiscal sustainability.
However, the Indian economy continued to show resilience. High-frequency indicators across industry and services remained strong. Additionally, headline CPI inflation edged up in September, driven by a broad-based rise in food, fuel, and core components.
Double-digit growth in merchandise exports during the first half of 2026-27 helped narrow the trade deficit. Furthermore, FDI, external commercial borrowings, and remittance flows all strengthened in August. Strong inflows under the FCNR(B) swap window also boosted India’s foreign exchange reserves.
Monetary Policy Transmission and NBFC Performance
One key article examines how monetary policy transmits to lending rates of scheduled commercial banks. The study finds that following a cumulative 125 basis point cut in the repo rate, the weighted average lending rate on fresh loans fell by 93 basis points between February 2025 and March 2026. Therefore, both repricing of loans and shifts in credit composition drove this decline.
Another article reviews the NBFC sector’s performance up to December 2025. NBFCs registered double-digit year-on-year credit growth during this period. Asset quality also improved consistently, with NPA ratios declining steadily. Additionally, a text-mining analysis reveals that NBFCs are increasingly adopting artificial intelligence for customer services, data analytics, and digital governance.
Nowcasting State-Level Economic Activity
A fourth article introduces an innovative approach to tracking regional economic activity in real time. Researchers combined satellite-based night-time light data with Google Trends to estimate quarterly economic output for Maharashtra, Karnataka, and Gujarat. This method improves nowcast accuracy compared to traditional single-variable approaches.
As a result, policymakers can detect economic turning points and shocks much earlier. The methodology is scalable and can supplement official statistical systems across other Indian states as well.
The views expressed in the bulletin articles belong to the authors and do not represent the official position of the Reserve Bank of India. Read the full bulletin here.
Source: RBI Press Releases
