New Delhi, Jan 29 (NationPress) In a time marked by increased global unpredictability, shifting geopolitics, and swift technological advancements, India’s monetary and financial systems have demonstrated strong performance during FY26 (April-December 2025). This resilience is supported by strategic policy initiatives and robust structural frameworks in the financial intermediation landscape, as detailed in the Economic Survey 2025-26 presented in Parliament on Thursday.

The survey emphasizes the importance of utilizing innovative and inclusive domestic finance channels, which can act as a safeguard against fluctuations in global financial markets.

Throughout FY26, the RBI has shown flexibility in liquidity management, ensuring that the banking sector maintained sufficient liquidity. This proactive stance has supported effective transmission to both money and credit markets, fulfilling the economy’s productive needs. The transmission of monetary policy to the lending and deposit rates of scheduled commercial banks has remained strong despite conditions of abundant liquidity.

India's financial regulatory framework reflects this necessity, as illustrated by the RBI’s groundbreaking regulatory framework released in May 2025. This framework establishes a clear, consultative, and impact-oriented approach to Monetary Management and Financial Intermediation.

Furthermore, India’s monetary management strategy successfully balances macroeconomic goals with social objectives. The quality of financial regulation is increasingly recognized as a crucial factor in ensuring economic resilience and sustained growth. The survey asserts that by maintaining price stability, fostering financial stability, and encouraging inclusive growth, monetary policy serves as a vital enabler for sustainable development and economic success in the nation.

In response to decreasing inflation, the RBI’s Monetary Policy Committee has lowered the repo rate while providing durable liquidity through Cash Reserve Ratio (CRR) reductions and Open Market Operations (OMO).

These adjustments aim to enhance credit flow, investment, and overall economic activity. Moreover, these initiatives have been effectively reflected in lending rates, with the average lending rates of scheduled commercial banks decreasing, showcasing the expansionary nature of monetary policy.

The survey also notes a positive trend in broad money growth, rising over 12 percent compared to around 9 percent a year earlier, indicating that banks have successfully utilized the liquidity released by the CRR cut. Additionally, the RBI’s OMO purchases have infused durable liquidity into the market, with a surplus of approximately ₹1.89 lakh crore on average during FY26 (up to January 8, 2026), as indicated by the net position under the Liquidity Adjustment Facility (LAF).

The survey further acknowledges a dedicated Regulatory Review Cell established under the RBI’s pioneering financial sector regulatory framework.

This Cell is responsible for systematically reviewing each regulation at least once every five to seven years. Such initiatives signify a transformation from reactive regulation to proactive governance that is responsive to changing market dynamics and global standards.