RBI Bulletin September 2026: Strong Growth, a High Credit-Deposit Ratio and Rising Private Investment
The Reserve Bank of India (RBI) released the September 2026 issue of its monthly Bulletin. It has seven speeches, three research articles and current statistics. The views in the articles belong to the authors, not officially to the RBI.
State of the Economy: India's economy grew by 7.8% in Q1 (April to June) of 2026-27, even as tensions in West Asia pushed up global energy prices. Headline retail inflation rose to 4.8% in August 2026, led by food, fuel and core items. The merchandise trade deficit (goods imported minus goods exported) narrowed because of strong exports.
Liquidity and the external sector: Extra money in the banking system (the liquidity surplus) jumped after large inflows of FCNR(B) deposits (foreign-currency deposits by Non-Resident Indians) under an RBI swap facility. The current account deficit was moderate in Q1, FDI flows were strong, and foreign exchange reserves reached an all-time high (about USD 765.9 billion as of September 18, 2026).
Credit-Deposit Divergence: Since 2022-23, bank loans have grown much faster than bank deposits, pushing the credit-deposit (CD) ratio above 80%. The article argues that a high CD ratio on its own is not a good sign of funding danger. Banks funded extra lending through cheaper borrowings, more capital and by shifting their other assets into loans.
Private Corporate Investment: The total cost of projects sanctioned by banks and financial institutions rose to about ₹4.4 lakh crore in 2025-26 (from about ₹3.7 lakh crore in 2024-25). The infrastructure sector, led by power, took the biggest share. Private companies plan capital spending (capex) of about ₹3.2 lakh crore in 2026-27, showing sustained investment momentum.
Credit-Deposit (CD) Ratio
The credit-deposit ratio, or CD ratio, tells us how much of the money a bank has received as deposits it has given out as loans. If a bank holds ₹100 in deposits and has given ₹80 as loans, its CD ratio is 80%. It is one of the simplest ways to see how actively banks are lending and how they are funding that lending.
The September 2026 RBI Bulletin studied why the CD ratio has stayed above 80% since 2022-23. It found that banks funded higher lending through cheaper borrowings, more capital and by shifting other assets into loans. It concluded that a high CD ratio alone does not show that India's banking system is under funding stress.
Private Corporate Investment and the Capex Cycle
Private corporate investment is the money that private companies spend on building long-lasting assets like factories, machines, power plants, roads and warehouses. This spending is called capital expenditure, or capex. When many companies increase capex together for a few years, and later slow down together, the pattern is called the capex cycle or investment cycle. Private capex is one of the strongest engines of long-term growth and job creation.
The RBI Bulletin article used the phasing plans of bank-funded and other projects to estimate private capex. It found that both the number and cost of sanctioned projects rose in 2025-26, led by power and infrastructure. Its estimate of about ₹3.2 lakh crore of capex in 2026-27 suggests the private investment cycle is still moving upward.
FCNR(B) Deposits: Foreign Currency Non-Resident (Bank) Accounts
An FCNR(B) deposit is a fixed deposit that a Non-Resident Indian (NRI) can open with a bank in India, but in a foreign currency like the US dollar. The money stays in that foreign currency, so the depositor does not lose if the rupee falls. It is a key channel through which Indians abroad send savings into Indian banks, and it helps India's foreign exchange reserves.
The September 2026 Bulletin noted that the liquidity surplus in the banking system surged because of FCNR(B) inflows under the RBI's swap facility. These inflows, along with strong FDI, helped India's foreign exchange reserves reach an all-time high.
- Real GDP growth in Q1 (April to June) 2026-27: 7.8%
- Headline CPI inflation in August 2026: 4.8%
- Foreign exchange reserves: all-time high, about USD 765.9 billion as of September 18, 2026
- Credit-deposit ratio: above 80% since the credit surge that began in 2022-23
- Projects sanctioned by banks and FIs: about ₹4.4 lakh crore in 2025-26 vs about ₹3.7 lakh crore in 2024-25
- Infrastructure share of sanctioned project cost in 2025-26: about 54%, led by power
- Envisaged private corporate capex for 2026-27: about ₹3.2 lakh crore
- FCNR(B) swap window for fresh deposits closed on August 31, 2026 (original deadline September 30, 2026)
- The RBI Bulletin has 7 speeches, 3 articles and current statistics in the September 2026 issue