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Informist, Tuesday, Aug. 11, 2026

 

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--RBI Malhotra: Macro economic fundamentals of Indian economy very strong
--RBI Malhotra: Inflation more or less under check
--RBI Malhotra: Capital flow steps bode well for Indian economy
--RBI Malhotra: Need to continuosly work on financial stability
--RBI Malhotra: Cannot have growth without financial stability
--RBI Malhotra: Need to improve customer service, financial inclusion
--RBI Malhotra: Need to keep balance between innovation and stability
--RBI Malhotra: Taking measures to improve corp bond market
--RBI Malhotra: AI key to improve corp bond market
--RBI Malhotra: Lot of scope there to reduce cost in cross border payments
--RBI Malhotra: Cross-border payments area of interest, including for BRICS 
--RBI Malhotra: Trading with lots of nations in local currency, volume low
--RBI Malhotra: In process of doing more MoUs with nations for rupee trade
--RBI Malhotra: Will continue our efforts to internationalise rupee
 

 

MUMBAI – The Reserve Bank of India will continue its efforts to reduce the cost and improve the speed of cross-border payments while promoting the use of the rupee and other local currencies in international trade, Governor Sanjay Malhotra said Tuesday. "Cross-border payments is an area of interest for all of us, including the BRICS," Malhotra said at an event here, adding that there is significant scope to reduce costs, particularly for retail transactions, and increase the speed of such payments.

 

Malhotra said several options are being discussed to improve cross-border payments, including central bank digital currencies and linkages between fast payment systems. "Look at UPI, for example. It is instantaneous. You have to wait for some hours, some days for your foreign remittances to take place," Malhotra said, highlighting the scope for improving the efficiency of international payments.

 

Malhotra said India already conducts trade with several countries in local currencies, although the volumes remain small and need to expand. The RBI has signed memoranda of understanding with the central banks of the UAE, Mauritius, Maldives and Indonesia to promote greater awareness among importers and exporters about the use of local currencies for trade.

 

"We are in the process of doing more such MoUs," Malhotra said, adding that the agreements have produced encouraging results. "We will continue our efforts to internationalise the rupee and promote the use of local currencies or cross-border payments or trade, etc.," he said.

 

MACRO FUNDAMENTALS STRONG

Malhotra said the macroeconomic fundamentals of the economy remain strong, with growth proving resilient and inflation broadly under control. "The macroeconomic fundamentals of the Indian economy again are very strong," he said, adding that inflation was "more or less under check", while balance sheets across the economy were looking healthy. The external sector is also robust, supported by India's foreign exchange reserves, he said.

 

Malhotra said measures taken by the government and other stakeholders following global shocks would help strengthen India's resilience. These include diversification of supply chains for energy, fertilisers and other critical goods, efforts to reduce energy intensity, ethanol blending, electric vehicles and free trade agreements.

 

He also said measures taken to strengthen capital flows "bode very well" for the Indian economy going forward. The Indian banking sector is also well positioned to deal with global risks, including those arising from the West Asia crisis, trade and tariff-related uncertainties and cyber risks, Malhotra said.

 

He said the banking sector remains robust, with gross non-performing assets below 2%, net NPAs below 0.5%, healthy equity coverage ratios, and good profitability. Financial stability will remain a fundamental priority for the RBI, Malhotra said, stressing that growth cannot be sustained without a stable financial system. "We need to continue to work on financial stability because that is really the bedrock. You cannot have growth without financial stability," he said.

 

The central bank will also continue to focus on improving ease of doing business, customer service and financial inclusion, he said. Improving the quality of financial services while bringing down costs for borrowers and lenders would remain an important priority, he added.

 

The central bank will continue to facilitate innovation in areas such as artificial intelligence and fintech, including through its regulatory sandbox. Malhotra said regulation would be introduced when necessary, particularly if there are concerns relating to financial stability or customer conduct.

 

CORPORATE BOND MARKET

The RBI, along with other stakeholders, is taking several measures to improve and deepen India's corporate bond market, Malhotra said. He said the Indian financial system has traditionally been bank-led, although the share of bank credit in total credit has declined over the years as non-banking financial companies and corporate bonds have expanded.

 

Reducing information asymmetry through greater availability of information will be important for further developing the corporate bond market, he said. Artificial intelligence could play a major role in this process, Malhotra said. "As and when this progresses, I am very confident that, as has been the case in many advanced nations, similarly even in India, corporate bonds will have a major presence in the Indian credit market," he said.  End

 

Reported by Kabir Sharma, Pratiksha, and Sagar Sen

Edited by Avishek Dutta

 

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