Banking & Economy Current Affairs July 2026

The Government of India (GoI) approved the Reserve Bank of India (RBI) proposal to conduct field trials of one billion polymer banknotes each in the Rs 10 and Rs 20 denominations, a significant step towards evaluating more durable currency notes. Minister of State for Finance Pankaj Chaudhary informed Parliament that the proposal was approved under Section 25 of the RBI Act, 1934, following the recommendation of the RBI's Central Board, and that the trial notes are worth about Rs 3,000 crore. The RBI will conduct the trials under different climatic and usage conditions to evaluate durability, security features and public acceptance; regular issuance will begin only after successful evaluation. Polymer notes are printed on a non-fibrous, non-porous polymer substrate instead of conventional banknote paper. The government clarified that paper currency is not being phased out - polymer notes are being tested as an additional option and would circulate alongside existing paper notes.

The Government of India (GoI) approved the Reserve Bank of India (RBI) proposal to conduct field trials of one billion polymer banknotes each in the Rs 10 and Rs 20 denominations. The proposal, worth about Rs 3,000 crore, was sent by the RBI on the recommendation of its Central Board under Section 25 of the RBI Act, 1934, which deals with the design, form and material of banknotes. Polymer (plastic) banknotes are printed on a non-fibrous, non-porous polymer substrate instead of conventional cotton-based paper, making them more durable, waterproof and harder to counterfeit. The RBI will test the notes under different climatic and usage conditions for durability, security features and public acceptance; regular issuance will begin only after successful evaluation. The government clarified the polymer notes are an additional option and there is no proposal to replace existing paper notes.

The International Monetary Fund (IMF), in its July 2026 World Economic Outlook (WEO) Update, lowered India's real GDP growth forecast for FY2026-27 to 6.4%, down from the 6.5% projected in April 2026, citing elevated global energy prices and trade uncertainty. The IMF raised India's FY28 forecast to 6.7% (from 6.5%), describing the dip as transient. India remains the world's fastest-growing major economy, well ahead of China (4.6%) and the United States (2.3%). The IMF retained global growth at 3.0% for 2026 and 3.4% for 2027. India's growth is powered by strong private consumption and a resilient services sector.

Edelweiss Mutual Fund launched the Edelweiss Nifty REITs & Realty Index Fund, India's first REITs-oriented open-ended passive index fund, tracking the Nifty REITs & Realty Total Return Index (TRI). The index currently allocates about 60% to listed REITs and 40% to listed real estate companies. Under SEBI regulations, Real Estate Investment Trusts (REITs) were reclassified as equity instruments from 1 January 2026 and became eligible for equity indices from 1 July 2026. REITs pool investor money to own and operate income-generating real estate, giving small investors exposure to property markets. InvITs (Infrastructure Investment Trusts) remain hybrid instruments and cannot be combined with REITs in a single passive index fund.

Bank of Maharashtra (BoM) launched "FinSpark''26", a national-level cybersecurity hackathon under the theme "Securing the Future of Banking", with the Indian Banks' Association (IBA), the Department of Financial Services (DFS) and COEP Technological University. It offers a prize pool of over ₹10 lakh; the top 20 teams present at the Grand Finale at COEP, Pune, and winners demonstrate at Global FinTech Fest 2026.

The India-UK Comprehensive Economic and Trade Agreement (CETA), along with the Agreement on Social Security (Double Contribution Convention), came into force on 15 July 2026 — India's most ambitious bilateral trade pact to date. The UK scraps duties on 96.8% of tariff lines (covering 97.7% of trade value) immediately; tariffs fall to zero on textiles, leather, marine products and engineering goods. India removes duties at once on 64.1% of tariff lines and phases out another ~21%, while shielding sensitive sectors (dairy, cereals, edible oils, apples). It boosts services trade, professional mobility and social-security protection for Indian professionals.

The <b>Ministry of Commerce and Industry (MoC&I)</b> released trade data for <b>Q1 (April-June) of FY2026-27</b>. India's total exports in Q1 FY27 stood at <b>USD 232.73 billion</b> and total imports at <b>USD 270.15 billion</b>. Merchandise exports were <b>USD 129.32 billion</b> (up from USD 111.57 bn in Q1 FY26) and services exports were estimated at <b>USD 103.41 billion</b>. Merchandise imports stood at USD 216.18 billion and service imports at USD 53.97 billion.

In July 2026, the Ministry of Statistics and Programme Implementation (MoSPI) announced plans to use the output Producer Price Index (PPI) as a deflator for quarterly and annual GDP estimates, replacing the Wholesale Price Index (WPI) wherever applicable. The PPI series was released by the Department for Promotion of Industry and Internal Trade (DPIIT) in June 2026. The revised GDP series has updated the base year to 2022-23 (from 2011-12) and adopted double deflation, which separately adjusts output and input prices. MoSPI plans to introduce the new PPI-based methodology with GDP estimates for the April-June quarter of 2026-27, while the CPI continues for specific granular items.

The Ministry of Statistics and Programme Implementation (MoSPI) announced it will use the output Producer Price Index (PPI) as a deflator for quarterly and annual GDP estimates, replacing the Wholesale Price Index (WPI) where applicable. The PPI series was released by the Department for Promotion of Industry and Internal Trade (DPIIT) in June 2026. A GDP deflator converts nominal GDP into real GDP by adjusting for price changes. The revised GDP series also updates the base year to 2022-23 (from 2011-12) and adopts double deflation (separately adjusting output and input prices). In June 2026, WPI inflation was 9.87% and output PPI inflation was 9.57%. The new methodology takes effect with the April–June 2026-27 GDP estimates, while CPI continues for specific granular items.

The Reserve Bank of India (RBI) reported its composite Financial Inclusion Index (FI-Index) rose to 70 in March 2026, up from 67 in March 2025. The RBI also issued final Prudential Norms on Specified Non-Financial Assets (SNFA) acquired by Regulated Entities, effective 1 October 2026, barring Regulated Entities from selling an SNFA back to the defaulting borrower, its promoters or related parties — tightening resolution of distressed loans under the Resolution of Stressed Assets Directions, 2025.

The Reserve Bank of India (RBI) released the composite Financial Inclusion Index (FI-Index) for FY 2025-26, which rose to 70 in March 2026 from 67 in March 2025, indicating continued improvement in the depth and quality of financial inclusion in India. The FI-Index is a comprehensive single-value measure (on a scale of 0 to 100, where 0 denotes complete financial exclusion and 100 full inclusion) capturing access, usage and quality of financial services across banking, investments, insurance, postal and pension sectors. Prudential norms on SNFA: The RBI also issued final 'Prudential Norms on Specified Non-Financial Asset (SNFA) acquired by Regulated Entities' under the Resolution of Stressed Assets Directions, 2025, tightening the framework governing the resolution of distressed loans. The norms take effect from 1 October 2026. Under the revised norms, Regulated Entities (REs) are prohibited from selling or transferring SNFAs back to the defaulting borrower, its promoters, related parties, or entities acting on the borrower's behalf — closing a route by which defaulters could reacquire assets surrendered in resolution.

Canada-based Fairfax Financial Holdings Limited emerged as the preferred bidder to acquire a 60.72% stake in IDBI Bank in July 2026, a significant step in the government's long-pending strategic disinvestment of the lender. The Government of India and Life Insurance Corporation (LIC) together are divesting the 60.72% stake. Fairfax is led by India-born billionaire Prem Watsa.

The Reserve Bank of India (RBI) announced that India's Financial Inclusion (FI) Index rose to 70.0 in March 2026, up from 67.0 in March 2025, reflecting deeper access to formal financial services. The FI-Index captures three weighted parameters — Access (35%), Usage (45%) and Quality (20%) — on a scale of 0 to 100, where 0 is complete exclusion and 100 is full inclusion.

The Reserve Bank of India (RBI) approved the appointment of Rajiv Kumar as the part-time chairman of HDFC Bank for a period of three years, effective 15 July 2026. Earlier in July 2026, the RBI appointed Ravi Shankar as an Executive Director (effective 1 July 2026) to head the Department of Statistics and Information Management (DSIM).

India Post recorded its highest-ever first-quarter revenue of over ₹4,000 crore (Q1 FY 2026-27), registering 22% year-on-year growth, as announced by Union Communications Minister Jyotiraditya M. Scindia. The milestone reflects India Post's push into parcel, logistics and citizen-centric financial services.

Dilip Asbe, MD & CEO of NPCI, was appointed to the Supervisory Board of SWIFT as the body transitions from a single-tier board to a two-tier governance structure (Supervisory Board + Management Board). The Supervisory Board will have 12 members (expandable to 15) — eight shareholder-affiliated and four independent directors — strengthening India's voice in global financial messaging.

Union Commerce & Industry Minister Piyush Goyal announced the formation of a Task Force to support India's toy sector, targeting a 5% share of the global toy market by 2032. It was announced at the 'Team Up for Toys' stakeholder meet organised by the Department for Promotion of Industry and Internal Trade (DPIIT) in New Delhi. The task force will focus on six areas: integrating with global value chains, strengthening domestic manufacturing, addressing value-chain bottlenecks, skilling and employment, design and innovation, and ease of doing business. A Toy Sector Playbook was launched as a roadmap for manufacturers, startups and MSMEs. India's toy ecosystem includes 21,000+ MSMEs, 770+ DPIIT-recognised startups, 50 toy clusters and 1,800+ BIS licensees.

On 15 July 2026, the Union Cabinet chaired by PM Narendra Modi cleared seven major decisions with a combined outlay of Rs 2,19,353 crore. Key approvals: Semicon 2.0 (outlay Rs 1,27,500 crore), the second phase of the India Semiconductor Mission; the Mobile Phone Manufacturing Scheme (MPMS) with Rs 62,500 crore over 5 years; and the National Investment Policy for Urea-2026 (NIPU-2026) to boost indigenous urea capacity. Rail projects cleared include doubling of the Paradeep-Haridaspur line (Rs 2,542 crore) and a fourth line between Dangoaposi-Rajkharsawan (Rs 1,365 crore), plus a 6-lane Greenfield elevated corridor linking NH-19 and the Varanasi Ring Road (UP) on Hybrid Annuity Model.

The National Statistics Office (NSO) under MoSPI launched the first trial Index of Services Production (ISP), India's first official monthly indicator of services-sector output, complementing the Index of Industrial Production (IIP). It is India's first high-frequency indicator dedicated to measuring services output, tracking short-term changes in the volume of output of the formal services sector against a base year. The services sector is India's largest GDP contributor, providing over 50% of Gross Value Added (GVA) since 2013-14.