Flexible Inflation Targeting
India's monetary policy framework, adopted after the Monetary Policy Framework Agreement (2015) and amendment of the RBI Act, 1934, under which the RBI targets CPI inflation of 4% with a tolerance band of plus or minus 2 percentage points.
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Current affairsRBI Proposes On-Tap Licensing for Urban Cooperative Banks (UCBs): Ending a 22-Year Pause, Tier Framework, and Banking Sector SignificanceThe Reserve Bank of India (RBI) is proposing to resume licensing of Urban Cooperative Banks (UCBs) after a 22-year pause — licensing was stopped in 2004 following the failures of the 1993–2001 liberalisation era. RBI issued a Discussion Paper in January 2026 and Governor Sanjay Malhotra announced in August 2026 that draft guidelines would be issued shortly for public consultation. The on-tap model means applications will be accepted on a continuous rolling basis once eligibility criteria are met, rather than in periodic windows. Current affairsAll 25 High Courts Get Permanent Chief Justices: Centre Notifies Eight Appointments — Collegium System, Article 217, and Judicial PendencyThe Ministry of Law and Justice on September 5, 2026, notified the appointments of eight High Court judges as Chief Justices across eight High Courts. 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Current affairs4th India-Singapore Ministerial Roundtable 2026: Sitharaman, Jaishankar, Goyal in Singapore for Trade, Digital, and Strategic PartnershipIndia and Singapore held the 4th India-Singapore Ministerial Roundtable (ISMR) and Business Roundtable (ISBR) in Singapore on August 20, 2026. The Indian delegation — led by Finance Minister Nirmala Sitharaman and including EAM S. Jaishankar, Commerce Minister Piyush Goyal, and IT Minister Ashwini Vaishnaw — reviewed bilateral cooperation in finance, trade, digital services, and advanced manufacturing, and signed multiple MoUs to deepen the Comprehensive Strategic Partnership. Current affairsIndia-Armenia Defence MoU 2026: Research, Innovation and Joint Production in Yerevan — Strategic Significance for India's Defence ExportsIndia and Armenia signed a Memorandum of Understanding (MoU) on cooperation in research, development, innovation, and joint production in the defence industry during Defence Secretary Rajesh Kumar Singh's two-day visit to Yerevan on August 17, 2026 — deepening bilateral defence ties amid Armenia's strategic realignment away from Russia.
In previous-year questions
- Under the Flexible Inflation Targeting (FIT) framework, which body is legally responsible for setting the inflation target in India?UPSC · Current Affairs
- Which index replaced the Wholesale Price Index (WPI) as the deflator for India's GDP under the revised National Accounts Statistics 2026?UPSC · Current Affairs
- Under RBI's Guidelines for Acquisition of Shares and Voting Rights in Private Sector Banks (2023), what happens when an entity crosses the 10% ownership threshold in a private sector bank, as LIC is trying to avoid by capping its ICICI Bank acquisition at 9.99%?UPSC · Current Affairs