Banking & Economy Current Affairs October 2026

The IMF released its October 2026 Global Financial Stability Report on 13 October at the Annual Meetings in Bangkok, warning that stretched valuations, rising sovereign yields and AI-linked leverage have raised financial-stability risks. It examined 14 circular AI financing deals struck since 2023, involving about $300 billion in equity, $650 billion in debt and $1.4 trillion in future revenue commitments. Under the adverse scenario, banks holding 22% of global banking assets would breach regulatory capital limits, up from 18% a year earlier. Over 70% of exploited software vulnerabilities this year left providers almost no time to patch, against about 300 days in 2021.

UNCTAD's Trade and Development Report 2026, subtitled "The Geoeconomics of Development", projects India growing 7.3% in 2026 - the fastest among large economies - on robust domestic demand, public infrastructure spending and expanding manufacturing capacity. Global growth is seen slowing to 2.6% from 2.9% in 2025, with developing economies at 4%. Asia is expected to supply 59% of global growth, with Kyrgyzstan at 8.8%, Uzbekistan 7.9%, Viet Nam 7.8% and China 4.5%. World trade hit a record USD 35 trillion in 2025 and is projected to grow about 4% in 2026, led by semiconductors and AI computing equipment.

The Reserve Bank of India has raised the minimum daily Cash Reserve Ratio maintenance requirement for scheduled banks from 90% to 99% of the prescribed CRR, effective 16 October 2026. The CRR rate itself stays unchanged at 3% of net demand and time liabilities (NDTL). Banks must now park almost their entire reserve requirement with the RBI every single day, instead of averaging it across the fortnightly reporting cycle. The move is aimed at absorbing surplus banking-system liquidity, which stood near Rs 3.88 lakh crore on 8 October 2026, and at making overnight money-market rates track the policy repo rate more closely.

The Reserve Bank of India's Monetary Policy Committee, meeting from 5 to 7 October 2026, raised the policy repo rate by 25 basis points to 5.50% — its first increase since February 2023 — and changed the stance from 'neutral' to 'calibrated tightening' on a 4-2 vote, the rate decision itself being unanimous. Governor Sanjay Malhotra said recalibration had become an imperative as food price pressures broadened and inflation expectations showed signs of hardening. The RBI lifted its FY27 real GDP growth projection to 7.1% while pegging headline CPI inflation near 5.8% over the next three quarters, taking near-term rate cuts off the table.

The Jio Platforms initial public offering, India's largest-ever IPO, opened for subscription on 21 October 2026 and was fully subscribed within hours. It is an entirely fresh issue of about 27 crore equity shares with no offer for sale, priced in a band of Rs 1,065-Rs 1,119 per share with a lot size of 12 shares, raising roughly Rs 30,000 crore (about USD 3.2 billion). At the upper band, Jio Platforms is valued at about Rs 10.3 lakh crore. Demand was led by qualified institutional buyers, who bid over three times their quota on day one. The issue closed on 23 October 2026.

The Supreme Court has held the permanent write-off of Rs 8,415 crore of Yes Bank's Additional Tier-1 (AT-1) bonds illegal, upholding a 2023 Bombay High Court ruling that had quashed the write-off over procedural lapses. The bonds, worth about USD 884 million, were written off in March 2020 during the RBI-supervised reconstruction — India's first such AT-1 write-off. Yes Bank shares fell 14.5% to Rs 18.12, their steepest drop since July 2020. The ruling exposes the bank to investor compensation claims and fresh capital needs; Japan's Sumitomo Mitsui Banking Corporation, which became the bank's largest shareholder through its 2026 stake purchase, holds 24.9%.

SEBI launched Project Jagrook, a nationwide investor-awareness and financial-literacy campaign, at Panjab University, Chandigarh on 5 October 2026, timed with World Investor Week 2026 observed from 5 to 11 October. Carrying the tagline 'Samajh Se Investing Simple', it will run through March 2027 across physical and digital channels in English, Hindi and 11 regional languages, urging investors to verify platforms, ignore anonymous tips and distrust exaggerated return claims. Its MUST component — Mentoring of University/College Students by Trainers — targets campus financial literacy. SEBI is running it with BSE, NSE, MCX, CDSL, NSDL, AMFI and the National Institute of Securities Markets.

The India-New Zealand Free Trade Agreement, signed on 27 April 2026 at Bharat Mandapam, New Delhi, came into force on 20 October 2026, with Commerce Minister Piyush Goyal confirming implementation alongside New Zealand's Todd McClay. New Zealand removed duties on 100% of its 8,284 tariff lines, while India liberalises 70.03% of its lines, covering about 95% of bilateral trade value. The Department of Revenue notified revised customs duty rates under Section 25(1) of the Customs Act, 1962. The partners target nearly Rs 35,000 crore in two-way trade by 2030, building on the Strategic Partnership agreed during the Prime Minister's July 2026 visit.

Union Commerce and Industry Minister Piyush Goyal has launched the National Strategic Trade Command Centre (NSTCC) at Vanijya Bhawan, New Delhi, a single digital control room built by the Department of Commerce to track trade performance, export promotion schemes and regulatory approvals in near real time. It draws on DGFT systems and the Trade Connect ePlatform, with opening dashboards covering the Importer-Exporter Code, Advance Authorisation, EPCG, Certificates of Origin, SCOMET and restricted items. The centre lands as India pushes export diversification through new free trade agreements, giving exporters and officials one consolidated view of approvals already digitised on Trade Connect.

Union Ports, Shipping and Waterways Minister Sarbananda Sonowal flagged off 540 tonnes of methanol from the Bogibeel terminal at Dibrugarh on 5 October 2026 — the first international cargo from the town in about 70 years. Produced by Assam Petro-Chemicals Ltd, Namrup, the consignment moves on the barge DLB Patkai with tug Kushal Konwar along National Waterway-2 (Brahmaputra) and the Indo-Bangladesh Protocol Route to Pangaon port near Dhaka, and on to Narayanganj — about 1,300 km, of which 768 km is on NW-2. Assam Chief Minister Himanta Biswa Sarma joined virtually.

The Directorate General of Foreign Trade extended the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme by three months to 31 December 2026, through a notification dated 30 September. Existing rates and value caps under Appendices 4R and 4RE stay unchanged, and benefits continue for Domestic Tariff Area units, Advance Authorisation holders, Special Economic Zone units and Export Oriented Units. RoDTEP refunds embedded central, state and local duties and taxes that no other scheme rebates through transferable electronic duty-credit scrips issued on the ICEGATE portal. It replaced the WTO-incompatible MEIS in January 2021.

The Jawaharlal Nehru Port Authority signed a USD 70 million (about Rs 672 crore) loan with the International Finance Corporation in late September 2026 to build shore power supply infrastructure across its container terminals at Nhava Sheva, Navi Mumbai - billed as the first blue financing transaction in India's maritime sector. Shore power lets berthed vessels switch off diesel auxiliary engines and draw grid electricity instead, cutting carbon emissions by about 63% and local air pollution by up to 90%. Work begins at one terminal and is targeted for completion by January 2028, extending the blue-finance push behind India's first blue bond.

India has notified the amended Double Taxation Avoidance Agreement with Mauritius, inserting a Principal Purpose Test (PPT) to curb treaty shopping. Notification S.O. 5611(E) of 13 October 2026, issued under Section 159(1) of the Income-tax Act, 2025, gives effect to the protocol, while the amended treaty entered into force on 10 August 2026. Under the new Article 27B, tax authorities may deny a treaty benefit if obtaining it was one of the principal purposes of an arrangement, unless the taxpayer shows the benefit accords with the treaty's object and purpose. Investments made before 1 April 2017 stay grandfathered under the 2016 protocol.

The 57th GST Council, chaired by Finance Minister Nirmala Sitharaman, met at Bharat Mandapam, New Delhi on 8 October 2026 and recommended a decisive shift to trust-based taxation. It cleared the removal of GST officers' power to arrest under Section 69 of the CGST Act, raised the criminal prosecution threshold from Rs 1 crore to Rs 5 crore, cut the general penalty from Rs 25,000 to Rs 10,000, shortened refund acknowledgement from 15 days to 10, and allowed small e-commerce sellers a simplified registration without premises in each state. GST rates were left unchanged, with rate matters moving to one dedicated meeting a year.

India's annual wholesale inflation rose to 11.39% in September 2026 from 9.92% in August, the Office of the Economic Adviser, DPIIT, reported on 14 October, with the all-commodities index at 112.5 on the new 2022-23 base year. Fuel and power drove the surge at 25.85%, led by crude petroleum and natural gas at 57.32% and mineral oils at 40.02%. Primary articles rose 8.67% and manufactured products 9.76%, while the WPI food index climbed to 8.66%. The release also carried the new Output Producer Price Index at 112.5 and a trial Input PPI at 106.1, under the PPI framework launched on 15 June 2026.

India's eight core industries grew 7.9% year-on-year in September 2026, up from a revised 5.9% in August, according to provisional data released by the Ministry of Commerce and Industry on 21 October 2026. Electricity (11.4%), coal (10.7%), refinery products (10.3%), cement (9.8%) and steel (4.9%) expanded, while fertilisers (-11.7%), natural gas (-4.6%) and crude oil (-1.4%) contracted. Cumulative growth for April-September 2026 stood at 5.1%, against 2.5% in the same period a year earlier. The Index of Eight Core Industries carries a 40.27% weight in the Index of Industrial Production, so the rebound points to firmer IIP readings for September.

The International Monetary Fund released its October 2026 World Economic Outlook on 13 October at the IMF-World Bank Annual Meetings in Bangkok, Thailand, raising India's growth forecast to 7%, a 60 basis point upgrade from the 6.4% projected in the July update. The IMF credited stronger-than-expected domestic demand and robust services activity, holding up despite Middle East conflict and elevated oil prices. It also lifted the following year's projection by 30 bps to 7%, and pegged India's retail inflation at 5%, easing to 4.4%. Global growth was nudged up 10 bps to 3.1% for 2026, with 3.4% retained for 2027.

The Finance Ministry's September 2026 Monthly Economic Review, released on 1 October, projects real GDP growth of 7.3 per cent in Q2 FY27 (July-September), easing from the 7.8 per cent the NSO reported for Q1 FY27. Exports ran at nearly USD 400 billion in the first five months of FY27, while a services trade surplus offset 65 per cent of August's merchandise trade deficit. The review flags geopolitical polarisation, volatile crude prices, US tariff pressure and El Nino risks to the rabi crop. Multilateral estimates have been firming up alongside, with the OECD raising its FY27 India forecast to 7.1 per cent in late September.

The Reserve Bank of India has sanctioned the amalgamation of the three Indian branches of Dubai-based Emirates NBD Bank (PJSC) at Mumbai, Chennai and Gurugram into RBL Bank, effective 1 December 2026, under Section 44A(4) of the Banking Regulation Act, 1949. It completes a sequence that began when Emirates NBD acquired a 60% stake in RBL Bank on 18 June 2026, buying 929.1 million shares at Rs 280 each for about Rs 26,016 crore, the largest foreign direct investment into Indian banking. In the same round the RBI also cleared REC Limited's merger into Power Finance Corporation.

The Cabinet Committee on Economic Affairs approved on 14 October the strategic disinvestment of IDBI Bank, clearing the sale of a combined 60.72% stake to 10955230 Canada Inc., a wholly owned subsidiary of Canada's Fairfax Financial Holdings, for Rs 52,878.08 crore. The Government sells 30.48% and LIC 30.24%, cutting their joint holding from 94.72% to 34%. The Government called it the largest FDI in India's financial sector and the biggest strategic disinvestment since Air India. Conditions include a mandatory open offer, a five-year lock-in, retention of the IDBI brand for three years, and LIC paring its stake to 15% within two years.

The Ministry of Ports, Shipping and Waterways launched two specialised credit-risk insurance products for shipbuilders on 13 October 2026, announced by Union Minister Sarbananda Sonowal at the 21st Maritime State Development Council meeting in Mumbai. The Shipbuilding Project Credit Risk Insurance Policy (SbPCP), developed by ECGC Ltd, covers export shipbuilding projects, while the Business Credit Shield Policy Shipbuilders (BCSPS), developed by The New India Assurance Company, covers domestic projects. Both shield yards against buyer or debtor default and delayed payments during long construction cycles, with the Centre subsidising premiums and backstopping insurers on claims. They sit under the Rs 19,989 crore Shipbuilding Development Scheme.

The Reserve Bank of India has directed authorised dealer banks to park a Foreign Exchange Risk Reserve (FERR) with the central bank equal to 20% of the rupee equivalent of every eligible foreign-exchange derivative contract above US$2 million in notional value, held as non-interest-bearing cash. Announced as the rupee neared a record low, it targets contracts in which users buy foreign currency against the rupee to hedge current-account exposures, making speculative hedging costlier; the RBI may vary the percentage. It follows the 63rd MPC meeting, which lifted the repo rate to 5.50%, and the CRR daily-maintenance rise to 99% from 16 October.

SEBI has mandated a colour-coded Credit Risk-o-Meter so that retail investors can read the credit risk of a debt issue at a glance. Modelled on the mutual fund Riskometer, it maps existing AAA-to-D credit ratings onto six colour-coded risk levels and must be displayed in offer documents, abridged prospectuses, private placement memoranda, issuer advertisements and on online bond platform providers (OBPPs). It covers non-convertible securities, commercial papers, securitised debt instruments, security receipts and market-linked debentures, and takes effect 45 days after the circular's issuance, around 21-22 November 2026, extending SEBI's recent retail-protection push.

The Reserve Bank of India has struck Paytm Payments Bank Ltd off the Second Schedule to the Reserve Bank of India Act, 1934, ending its status as a scheduled bank. The exclusion was notified on 31 July 2026 under Section 42(6)(b) of the Act and published in the Gazette of India in September 2026. RBI had cancelled the bank's licence in April 2026 for persistent non-compliance and conduct prejudicial to depositors' interests, after which the Delhi High Court ordered the company wound up. Scheduled status requires paid-up capital and reserves of at least Rs 5 lakh and carries access to RBI refinance and clearing facilities.

PFRDA handed Bank of Baroda its Certificate of Appointment as a pension fund sponsor on NPS Divas, 1 October 2026, making it only the second public sector bank in pension fund management after SBI, which entered the segment in 2008. MD and CEO Debadatta Chand received the certificate. The bank's new arm, BoB Pension Fund Management Company, has Rs 100 crore of authorised capital, with BoB holding 80.10 per cent and Baroda BNP Paribas AMC 19.90 per cent. BoB also launched Tatkal NPS on the BHIM app for paperless onboarding.

The Finance Ministry kept interest rates on small savings schemes unchanged for the third quarter of FY27, covering 1 October to 31 December 2026 — the 14th consecutive quarter without a revision, the last change having come in the fourth quarter of FY24. Rates stay put across the Public Provident Fund, Sukanya Samriddhi Yojana, Senior Citizen Savings Scheme, National Savings Certificate, Kisan Vikas Patra, post office time deposits and the Monthly Income Scheme. Small savings rates are reviewed every quarter and benchmarked to secondary-market yields on government securities of comparable maturity under the formula recommended by the Shyamala Gopinath Committee of 2011.

The Bankers' Books Evidence Act, 2026 took effect on 1 October 2026, replacing the colonial-era Bankers' Books Evidence Act, 1891 and making India's rules on banking evidence technology-neutral. 'Bankers' books' now covers records kept in written or physical form or stored in any data-storage mechanism, so electronic and digital records are admissible provided they are true copies with no unauthorised alteration or tampering. Banks may file certified copies instead of originals, and a bank officer cannot be compelled to testify or produce records unless a court records a special cause in writing. The Government may extend the Act to other financial entities by notification.

The roughly 1 GW data-centre campuses being built at Visakhapatnam, Andhra Pradesh by AdaniConneX - the Adani Enterprises-EdgeConneX joint venture - with Google will use air cooling rather than water-based evaporative cooling. Combined freshwater draw across the three sites is planned to stay below the volume of an Olympic-sized swimming pool, about 80% of it for landscaping, kitchens and worker facilities, with on-site recycling, dedicated industrial water connections instead of municipal supply, and a zero-discharge policy. Google calls the USD 15 billion project its largest investment in India; ground was broken on 28 April 2026 and phase one is targeted for December 2028.

The Ministry of Steel released the draft National Steel Policy 2047, targeting 604 million tonnes (Mt) of crude steel capacity, 505 Mt of finished steel demand, per-capita consumption of 302 kg and 45 Mt of exports by 2047, the centenary of Independence. India is the world's second-largest crude steel producer, but raw materials make up 65-70% of steelmaking cost and roughly 92% of coking coal is imported, so the draft pushes domestic washeries, scrap recycling and green steel. It supersedes the National Steel Policy 2017, which set a 300 Mt target for 2030-31, and complements the Steel Industry Safety Council set up in September 2026.

UltraTech Cement said on 5 October 2026 that it had become the first Indian cement company to cross 2 GW of green energy capacity, reaching 2,024 MW — 1,580 MW of renewables plus 444 MW of waste heat recovery. Recent additions include 116.55 MW of wind at a hybrid project in Barmer, Rajasthan and 10 MW of waste heat recovery in Karnataka. Green power now meets about 48% of the company's needs; nearly a third of its 76 plants cross 50% green use and five exceed 95%. UltraTech targets 85% green power by 2030 and 100% renewable electricity by 2050.