Banking Regulation Act, 1949
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Current affairsRBI Data Centre & Cybersecurity Training Institute Inaugurated in BhubaneswarPrime Minister Narendra Modi inaugurated the Reserve Bank of India's new ₹169-crore Data Centre and Cybersecurity Training Institute in Bhubaneswar, Odisha on 25 October 2026. The data centre has received the Uptime Institute Tier IV certification — the highest global benchmark for data-centre resilience — and will host critical payment and settlement systems. The accompanying Cybersecurity Training Institute will provide specialised training in enterprise computing, AI, and quantum-computing-based cybersecurity. Current affairsIDBI Bank Privatisation: Cabinet Approves ₹52,878 Crore Sale of 60.72% Stake to Fairfax Financial Holdings — India's Largest Banking Sector FDIThe Union Cabinet on 14 October 2026 approved the strategic disinvestment of IDBI Bank, clearing the sale of a combined 60.72% stake held by the Government of India and the Life Insurance Corporation of India to Fairfax Financial Holdings for ₹52,878 crore (approximately US$6.3 billion) — the largest foreign direct investment ever recorded in India's financial sector. The transaction remains subject to Reserve Bank of India's fit-and-proper assessment of the acquirer. Current affairsRBI MPC October 2026 Decision: Repo Rate Raised to 5.5% — First Hike Since February 2023, Stance Shifts to Calibrated TighteningThe Reserve Bank of India's six-member Monetary Policy Committee (MPC), at its October 7, 2026 meeting chaired by Governor Sanjay Malhotra, unanimously raised the repo rate by 25 basis points to 5.5% — the first increase since February 2023 — and shifted the policy stance to "calibrated tightening" as rising inflation and elevated global oil prices prompt the central bank to reverse its 2025 easing cycle. Current affairsAnup Bagchi Appointed MD & CEO of HDFC Bank: RBI Approval, Leadership Transition and Banking Governance ImplicationsThe Reserve Bank of India (RBI) formally approved Anup Bagchi as the Managing Director and Chief Executive Officer of HDFC Bank for a three-year term effective 27 October 2026, succeeding Sashidhar Jagdishan. Bagchi, a 56-year-old IIM Bangalore and IIT Kanpur alumnus, moves from ICICI Prudential Life Insurance Co and becomes the first external candidate to head India's largest private-sector bank by assets. Current affairsRBI Monetary Policy Committee (MPC) October 2026 Meeting: Key Context, Rate Watch and Monetary Policy FrameworkThe Reserve Bank of India's Monetary Policy Committee (MPC) commenced its three-day bi-monthly meeting on October 5, 2026, with the policy decision scheduled for announcement on October 7. The current repo rate stands at 5.25%, held unchanged across four consecutive meetings since a 125 basis-point cumulative easing cycle in 2025. The 63rd MPC meeting takes place against a backdrop of rising retail inflation (~4.82% in August 2026) and elevated global interest rates. Current affairsSC in Sandeep Ghandat vs RBI (2026 INSC 955): RBI's Power to Supersede Multi-State Co-operative Bank Boards Not Capped at Six MonthsOn September 3, 2026, the Supreme Court of India held in Sandeep S. Ghandat vs Reserve Bank of India (2026 INSC 955) that the RBI's statutory power under Section 36AAA(1) of the Banking Regulation Act, 1949 to supersede the Board of Directors of a multi-State co-operative bank is not limited to the six-month cap prescribed under Article 243ZL(1) of the Constitution. The court set a five-year aggregate ceiling and ruled that state government consultation is not required for multi-State co-operative banks. Current affairsIFC USD 1 Billion MSME Credit Facility via SIDBI: Long-Term Finance for India's Small BusinessesIndia's Ministry of Finance secured USD 1 billion from the International Finance Corporation (IFC), the private-sector arm of the World Bank Group, to expand long-term credit availability to Micro, Small and Medium Enterprises (MSMEs) through SIDBI. The facility — USD 500 million from IFC's own account and USD 500 million mobilised through SIDBI's lender syndicate — enables loans with tenures of up to seven years and has been swapped into Indian rupees through the RBI's special currency swap window. Current affairsCoastal Local Area Bank Achieves Scheduled Bank Status: India's First LAB Included in Second Schedule of RBI ActThe Reserve Bank of India (RBI) has included Coastal Local Area Bank Limited, Vijayawada — India's first-ever Local Area Bank — in the Second Schedule to the RBI Act, 1934, granting it Scheduled Bank status. The RBI subsequently amended the CRR and SLR directions for Local Area Banks to incorporate scheduled bank provisions including Incremental CRR and daily minimum CRR maintenance. Current affairsRBI Financial Stability Report June 2026: Banking Sector at Multi-Decadal Low NPA, Rising Household Debt, and AI-Driven Cyber RisksThe Reserve Bank of India's Financial Stability Report (FSR) for June 2026 reports India's banking sector has achieved a multi-decadal low Gross Non-Performing Asset (GNPA) ratio of 1.8%, while flagging rising household debt (45.5% of GDP) and AI-enabled cyberattacks as the top emergent systemic risks — critical reading for UPSC, Banking, and SSC aspirants. Current affairsLIC Gets RBI Approval to Acquire Up to 9.99% Stake in ICICI Bank: Regulatory Framework, Insurance-Banking Linkage, and UPSC SignificanceThe Reserve Bank of India granted the Life Insurance Corporation of India (LIC) approval to acquire up to 9.99% of ICICI Bank's paid-up share capital or voting rights within one year from September 4, 2026. This marks a significant regulatory development at the intersection of banking supervision, insurance regulation, and India's evolving financial conglomerate architecture. Current affairsThree New Part-Time Directors on RBI Central Board: Annie George Mathew, Janmejaya Kumar Sinha, Syed Akbaruddin — RBI Governance and the Central Board's RoleThe Government of India appointed Annie George Mathew (former Special Secretary, Ministry of Finance), Janmejaya Kumar Sinha (Chairman, BCG India), and Syed Akbaruddin (former Permanent Representative to the UN, now Dean of Kautilya School of Public Policy) as part-time non-official directors on the RBI Central Board for four-year terms effective August 24, 2026. Former ISRO chief S. Somnath and industrialist Anand Mahindra were also appointed/re-appointed to the board in the same round. Current affairsIndia's Forex Reserves Hit Record $729.33 Billion: FCNR(B) Swap Facility, RBI Measures, and the Macroeconomic SignificanceIndia's foreign exchange reserves climbed to an all-time record of $729.33 billion in the week ending 21 August 2026, surpassing the previous record of $728.49 billion set in February 2026, driven by $73 billion in inflows under RBI's concessional FCNR(B) deposit and overseas borrowing hedging facilities launched in June 2026.
In previous-year questions
- India's Sovereign Green Bonds (SGrBs) are classified as Statutory Liquidity Ratio (SLR)-eligible securities. What does SLR mean in the context of Indian banking?OTHER · Current Affairs
- Which of the following statements about the Union List (List I, Seventh Schedule) entries related to the Reserve Bank of India is correct?UPSC · Current Affairs
- Under which provision of the Banking Regulation Act, 1949 does any entity — including a financial institution — require prior written approval from the Reserve Bank of India to acquire 5% or more of voting rights in a banking company?UPSC · Current Affairs
- The Life Insurance Corporation of India (LIC) was established under which legislation, and which regulatory body oversees LIC's investment activities including its ICICI Bank stake acquisition?UPSC · Current Affairs
- The RBI's approval granted to LIC to acquire up to 9.99% stake in ICICI Bank (a D-SIB) on September 4, 2026, comes with a one-year validity clause. What happens if LIC does not complete the acquisition within this window?OTHER · Current Affairs
- Local Area Banks (LABs) in India were set up under the RBI's scheme announced in 1996. Which of the following statements about LABs is/are correct? 1. LABs can operate across all districts of a state without any geographic restriction. 2. LABs are private-sector banks regulated by the Reserve Bank of India under the Banking Regulation Act, 1949. 3. As of 2026, only two Local Area Banks are operational in India. Select the correct answer:UPSC · Current Affairs
- How does Local Area Bank (LAB) differ from a Small Finance Bank (SFB) in India?UPSC · Current Affairs
- Section 36AAA of the Banking Regulation Act, 1949, which empowers the RBI to supersede the Board of co-operative banks, was inserted by which legislation?OTHER · Current Affairs
- Under which section of the Banking Regulation Act, 1949 does the RBI's prior approval become mandatory for the appointment or removal of a banking company's Managing Director and CEO?UPSC · Current Affairs
- Anup Bagchi, appointed MD & CEO of HDFC Bank in October 2026, holds degrees from which two premier Indian institutions?UPSC · Current Affairs
- The IDBI Bank privatisation (2026) requires approval from which regulator before legal ownership transfer to Fairfax Financial Holdings can be completed?UPSC · 2026 · Current Affairs