Banking current affairs, 2 August 2026: RBI reworks bulk-deposit pricing, and the MPC meets this week

Two things stand out this week: a regulatory change to how banks price and show their deposit rates, and the rate-setting meeting that lands mid-week. Around them sit the routine external-sector numbers, which repay reading. As always each item links to the official release, and for each we set out the concept an examiner would actually build a question around.

The usual caution applies, and one point is worth stating plainly this week: the Monetary Policy Committee’s decision is not yet out as this is written. We report what a release says, so you will find the meeting and the framework below, and the resolution added only once the RBI publishes it. Filling that gap with a guess is how a current affairs digest stops being worth reading.

The lead: how banks may price and must disclose bulk deposits

This is the substantive regulatory item of the week. On 30 July 2026 the RBI issued Amendment Directions revising the rules on interest rates for bulk deposits, and they take effect from 1 October 2026.

RBI Issues Amendment Directions on Interest Rate on Deposits

What actually changes, in two parts:

1. Pricing. A bank may now offer a differential rate of interest on bulk deposits by taking into account the differential run-off rate applicable to such deposits under the Liquidity Coverage Ratio (LCR) framework. In plain terms, deposits that are assumed to flee faster under stress may be priced differently from those that are assumed to stay.
2. Disclosure. Interest rates payable on deposits must be strictly as per the schedule published in advance on the bank’s website, and the rates on bulk deposits must be disclosed on the website by 10:00 am, with a ten-minute grace period, on each business day. Alongside this, the requirement that similar deposits accepted on the same day for the same amount carry a uniform rate across a bank’s branches and customers is retained.

The Directions amend the Reserve Bank of India (Interest Rate on Deposits) Directions, 2025, and were issued under Section 35A of the Banking Regulation Act, 1949, across six categories of banks: commercial banks, small finance banks, regional rural banks, payments banks, local area banks and urban co-operative banks.

The concept being tested. Three ideas are bundled here, and each is examinable on its own.

• A bulk deposit, as the RBI’s Interest Rate on Deposits Directions define it, is a single rupee term deposit above a high threshold (₹3 crore and above for commercial banks; confirm the exact figure in the Directions, as it differs for some categories). This is wholesale funding, not the ordinary saver’s account, which is why the RBI can allow banks more freedom here without touching retail depositors.
• The Liquidity Coverage Ratio requires a bank to hold enough High Quality Liquid Assets to cover its total net cash outflows over a 30-day stress scenario, and the norm is that the ratio must be at least 100%. The run-off rate is the fraction of a given deposit assumed to be withdrawn in that stress window. Stable retail deposits have low run-off rates; large wholesale deposits have high ones. Letting banks price bulk deposits by their run-off rate simply aligns the price of the money with the liquidity risk it carries.
• Section 35A is the RBI’s power to give directions to banking companies in the public interest, and it is the provision under which a great many such directions are issued. A question that asks “under which section did the RBI issue these directions” is testing recall of exactly this.

The week’s set-piece: the Monetary Policy Committee meets, 3 to 5 August

The RBI’s Monetary Policy calendar sets the third bi-monthly meeting of 2026-27 for 3, 4 and 5 August 2026, with the resolution due on the last day. At the previous meeting, on 5 June 2026, the MPC left the policy repo rate unchanged at 5.25% and kept the stance neutral; that is where the rate sits going into this meeting. We will add the outcome here once the RBI publishes the resolution.

The concept being tested. The mechanics of the committee are far more examinable than any one decision.

• The MPC has six members: the RBI Governor as chairperson, the Deputy Governor in charge of monetary policy, one officer of the Bank nominated by its Central Board, and three external members appointed by the central government. It is constituted under the RBI Act, 1934 (Section 45ZB).
• Decisions are taken by a majority of votes, and in the event of a tie the Governor has a second, casting vote. The committee must meet at least four times a year.
• The MPC operates under flexible inflation targeting: the target is 4% CPI inflation with a tolerance band of plus or minus 2% (that is, 2% to 6%), set by the central government in consultation with the RBI. The repo rate is the instrument; the weighted average call rate is the operating target it steers.

If the framework is not yet second nature, read RBI and monetary policy basics before the resolution lands, so the announcement reads as confirmation rather than news.

The external sector: reserves, and the FCNR(B) swap inflows

Two releases this week speak to the same story, the health of India’s external account, from two directions.

First, the weekly reserves. As on 24 July 2026, the Weekly Statistical Supplement puts the position at:

Component	US$ million
Total reserves	682,354
Foreign Currency Assets	555,929
Gold	103,058
SDRs	18,617
Reserve position in the IMF	4,750

Total reserves rose by US$6,118 million over the week.

Second, the special swap window. Back on 5 June 2026 the RBI announced a facility offering concessional swaps for fresh FCNR(B) deposits and for External Commercial Borrowing and overseas foreign-currency borrowing inflows, and it reported the take-up as on 31 July 2026:

Position of forex inflows under the swap facility

Route	US$ million
FCNR(B) deposits	36,725
Overseas foreign-currency borrowings	2,575
External Commercial Borrowings	1,516
Total	40,816

The FCNR(B) window runs to 30 September 2026; the borrowing windows run to 31 December 2026.

The concept being tested. Learn the composition and the instruments, not the exact figures.

• India’s foreign exchange reserves have four components: Foreign Currency Assets (much the largest), Gold, Special Drawing Rights, and the Reserve Position in the IMF. FCA is held in major currencies and can move on valuation alone as those currencies rise or fall against the dollar, so a weekly change is not the same as a flow of money.
• An FCNR(B) account is a Foreign Currency Non-Resident (Bank) term deposit: an NRI holds it in a foreign currency, so the depositor bears no rupee exchange risk. A swap facility lets a bank hand the RBI those dollars for rupees now and reverse the trade later at a pre-agreed rate; offering it at a concessional rate is a deliberate nudge to pull dollars in, which supports both the reserves and the rupee.
• External Commercial Borrowings are foreign-currency loans raised by eligible Indian entities from lenders abroad. Grouping FCNR(B), ECB and OFCB inflows under one window shows the RBI using capital-account tools, not the repo rate, to steady the external account.

Supervision, consolidated: 628 circulars become 64 Master Directions

A quieter but genuinely useful housekeeping item. On 31 July 2026 the RBI’s Department of Supervision replaced a sprawl of instructions with a consolidated set.

Consolidation of supervisory instructions into Master Directions

The exercise folds 628 circulars into 64 Master Directions, organised function-wise across 11 types of regulated entities — from commercial banks and small finance banks to NBFCs, asset reconstruction companies and credit information companies. A parallel circular lists the 628 instructions being repealed.

The concept being tested. Know where a Master Direction sits. The RBI communicates through several instruments, and a Master Direction is the consolidated, subject-wise statement of all its instructions on a topic, meant to be the single place a regulated entity looks rather than chasing dozens of separate circulars. Consolidation of this kind is about rationalising compliance, reducing cost and the chance of a firm missing an instruction — a theme the RBI returns to often and a tidy one-line answer if asked why it was done.

What to write in your notebook

Four lines:

1. From 1 October 2026, banks may set differential rates on bulk deposits by LCR run-off rate, and must disclose bulk-deposit rates on their website by 10:10 am each business day. Issued under Section 35A of the Banking Regulation Act, 1949.
2. The MPC meets 3 to 5 August 2026; the repo rate stands at 5.25% with a neutral stance going in. Six members, majority vote, Governor’s casting vote, at least four meetings a year, under a 4% (±2%) inflation target.
3. Forex reserves as on 24 July 2026 stood at about US$682 billion; the four components are FCA, gold, SDRs and the reserve position in the IMF.
4. The RBI consolidated 628 supervisory circulars into 64 Master Directions across 11 types of regulated entities.

For the framework behind the second and third lines, see RBI and monetary policy basics. We will update this page with the MPC resolution once it is published on 5 August.