India’s financial markets have shown strong resilience amid global uncertainty, RBI Governor Sanjay Malhotra said at the 25th FIMMDA-PDAI Annual Conference in Amsterdam on May 1, 2026. He highlighted the Indian financial markets resilience as both timely and well-earned, citing robust macroeconomic fundamentals and steady reforms.
India’s Economy Holds Firm Against Global Headwinds
The global economy faces serious challenges today. Geo-economic fragmentation, high public debt, stretched asset valuations, and rising geopolitical tensions in West Asia are all weighing on markets. Additionally, the rapid growth of private credit markets has introduced new systemic risks worldwide.
However, India has remained a bright spot. The economy grew at an average of 8.2% between 2021 and 2025. For 2025-26, growth is estimated at 7.6%, and the RBI projects 6.9% growth in 2026-27. Meanwhile, headline CPI inflation has stayed below the 4% target, and foreign exchange reserves cover 11 months of imports.
Governor Malhotra also noted that India’s banking sector has transformed significantly. Capital adequacy, asset quality, and profitability have all improved. Corporate bond markets, therefore, are seeing stronger fund mobilisation, broadening financing channels beyond traditional bank credit.
Key Measures to Deepen Indian Financial Markets
The RBI has taken several steps to develop India’s financial markets further. For example, it introduced electronic trading platforms for forex options and extended central clearing of FX forwards to 36-month tenors. As a result, market transparency and efficiency have improved considerably.
Additionally, the RBI eased macroprudential norms for foreign portfolio investors in corporate bonds. It also expanded the Voluntary Retention Route and connected NDS-OM with global bond trading platforms to deepen the government securities market. These moves aim to attract greater foreign participation.
Governor Malhotra, however, pointed out five areas that still need attention. Liquidity across all government securities tenors must improve. Interest rate derivatives remain concentrated in very few products. Indian banks also need to evolve as global market-makers in INR. Furthermore, the FX Retail platform sees limited use, and credit derivatives remain largely underdeveloped.
Shared Responsibility for Market Integrity
The Governor reminded banks and primary dealers of their responsibilities. They hold significant market power and must ensure fair, transparent access for all users. Therefore, protecting market integrity is not optional — it is a core duty.
He concluded by affirming that the RBI will continue to deepen markets, broaden participation, and strengthen institutional frameworks. Collective collaboration, he stressed, is essential for India’s financial markets to become deeper and more dynamic in the years ahead.
Source: RBI Speeches
