A. Certificates of Authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 for Setting up and Operating Payment System in India

The Payment and Settlement Systems Act, 2007 along with the Board for Regulation and Supervision of Payment and Settlement Systems Regulations, 2008 and the Payment and Settlement Systems Regulations, 2008 have come into effect from 12th August 2008.

The list of 'Payment System Operators’ authorised by the Reserve Bank of India to set up and operate in India under the Payment and Settlement Systems Act, 2007 is as under:

B. Certificates of Authorisation Revoked by the Reserve Bank of India in exercise of the powers conferred under the Payment and Settlement Systems Act, 2007

C. Authorised entities whose Payment System operations have ceased.

D. Entities whose Certificate of Authorisation to operate a Payment System have been cancelled on account of voluntary surrender by the entity.

E. Entities whose Certificate of Authorisation to operate a Payment System have been cancelled as per regulatory requirement.

F. Entities whose Certificate of Authorisation to operate a Payment System is under process of cancellation as per regulatory requirement/Voluntary Surrender

Today, the Reserve Bank of India released the balance of payments (BoP) data for the third quarter (Q3), i.e., October-December of 2025-26, on its website (www.rbi.org.in). On the basis of these data, the sources of variation in foreign exchange reserves during April-December 2025 are detailed below in Table 1.

On a balance of payments basis (i.e., excluding valuation effects), foreign exchange reserves decreased by US$ 30.8 billion during April-December 2025 as compared to a depletion of US$ 13.8 billion during April-December 2024. Foreign exchange reserves in nominal terms (i.e., including valuation effects) increased by US$ 19.4 billion during April-December 2025 as against a depletion of US$ 10.7 billion in April-December 2024 (Table 2).

The valuation gain, primarily reflecting higher price of gold, depreciation of US dollar against major currencies and lower bond yields, increased to US$ 50.2 billion during April-December 2025 from US$ 3.1 billion during April-December 2024.

(Brij Raj)           
Chief General Manager

Press Release: 2025-2026/2202

	Volume XXI | Issue 11 | February 2026 MONETARY & CREDIT INFORMATION REVIEW

I. Monetary Policy

Governor’s Monetary Policy Statement on February 6, 2026

Statement on Developmental and Regulatory Policies

This Statement sets out various developmental and regulatory policy measures relating to (i) Regulations; (ii) Payments System; (iii) Financial Inclusion; (iv) Financial Markets; and (v) Capacity Building.

I. Regulations

1. Advertising, Marketing and Sales of Financial Products and Services by Regulated Entities (REs)

Mis-selling financial products and services by any RE has significant consequences for both customers as well as the RE. There is a felt need to ensure that third party products and services that are being sold at the bank counters are suitable to customer needs and are commensurate with the risk appetite of individual clients. It has therefore been decided to issue comprehensive instructions to REs on advertising, marketing and sales of financial products and services. The draft instructions in this regard shall be issued shortly for public consultation.

2. Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents

Currently, different sets of instructions are applicable to different categories of Regulated Entities (REs) with respect to the engagement of recovery agents and conduct related aspects of loan recovery.

It has now been decided to review and harmonise all the extant conduct related instructions on engagement of recovery agents and other aspects related to recovery of loans. Accordingly, the draft instructions in this regard shall be issued shortly for public consultation.

3. Review of framework of Limiting Customer Liability in digital transactions

The extant instructions on limiting the liability of customers in unauthorised electronic banking transactions were issued in 2017, which deal with scenarios and timelines for zero / limited liability of a customer. In view of the rapid adoption of technology in the banking sector and payments systems, since issuance of these instructions, the existing instructions have been reviewed. Accordingly, the draft revised instructions, including a framework for compensation in case of small value fraudulent transactions, shall be issued shortly for public consultation.

4. Bank Lending to Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) were conceptualised in India with a view to free up banks’ funds in completed and operational real estate and infrastructure projects by refinancing such exposures with pooled funds of institutional as well as retail investors. Consistent with these objectives, commercial banks were not permitted, ab initio, to lend to these entities. While bank lending to InvITs was allowed subsequently, lending to REITs was not permitted hitherto. Upon review and considering the presence of strong regulatory and governance framework for listed REITs, it is proposed to permit commercial banks to extend finance to REITs, subject to appropriate prudential safeguards. The existing guidelines in respect of lending to InvITs are also being harmonised for parity with prudential safeguards proposed for lending to REITs. Draft directions in this regard will be issued shortly for public consultation.

5. Review of Lending norms for UCBs

In the recent past, several regulatory measures have been undertaken with the objective of providing greater flexibility to UCBs in their lending operations. It is now proposed to rationalise the extant regulatory norms applicable for unsecured loans by UCBs; limits for lending to nominal members; and the tenor and moratorium requirements for housing loans. The proposed review shall adopt inter alia, a tiered and simplified approach while maintaining prudential discipline, taking into consideration the growth in total loans and advances of the UCBs over the past few years. Draft directions in this regard will be issued shortly for public consultation.

6. Exemption from registration to eligible NBFCs not availing public funds and not having customer interface (including ‘Type I NBFCs’)

The Scale-Based Regulatory Framework for NBFCs envisages differential regulatory treatment for NBFCs that do not avail public funds and do not have any customer interface. Given their unique nature, a review of the regulations presently applicable to these NBFCs has been undertaken. Considering their significantly lower systemic-risk profile, it is proposed that such Type-I NBFCs with asset size not exceeding ₹1,000 crore, may be exempted from registration requirement with the Reserve Bank subject to certain specified conditions. The proposed exemption will reduce compliance requirements for these NBFCs. Accordingly, draft Amendment Directions will be issued shortly for feedback from stakeholders.

7. Amendment of NBFC Branch Authorisation Directions-2025

At per extant regulatory requirement, NBFC - Investment and Credit Companies (ICCs) engaged in the business of lending against gold collateral with over 1,000 branches are required to obtain prior RBI approval for opening new branches. In view of the comprehensive prudential and governance framework applicable to NBFC-ICCs, it is proposed to dispense with the requirement of prior approval for opening branches by such NBFCs. The draft instructions in this regard shall be issued shortly seeking stakeholders’ comments.

II. Payments System

8. Discussion Paper on “Exploring safeguards in digital payments to curb frauds”

Over the past decade, digital payments in India have expanded at an unprecedented pace, reflecting a structural shift in the way individuals and businesses conduct financial transactions. However, it has been accompanied with growing sophistication of fraudulent activities targeting innocent customers. In alignment with the objective of promoting digital payments in a safe and secure manner, it is proposed to issue a Discussion Paper exploring the introduction of calibrated safeguards in digital payments such as introduction of lagged credits, additional authentication for specific class of users like senior citizens, etc. The proposed measures are intended to mitigate frauds and strengthen customer protection.

III. Financial Inclusion

9. Revision in Lead Bank Scheme

The Reserve Bank has undertaken a detailed review of the existing guidelines on Lead Bank Scheme (LBS). It is now proposed to issue a comprehensive set of instructions on the Scheme with a view to streamline the operational aspects. In the revised Scheme, the objectives of LBS and the framework to achieve them are proposed to be delineated clearly. The revised guidelines are expected to enhance the effectiveness of the Scheme. The draft Circular will be issued shortly for public consultation. In addition, the Reserve Bank will be launching a unified portal for reporting of Bank-wise LBS data which is currently fragmented across various portals. This is expected to significantly enhance the data quality and provide better insights towards achieving the objectives of LBS.

10. Revision in the Guidelines of Kisan Credit Card (KCC)

The Reserve Bank has comprehensively reviewed the KCC Scheme with a view to expand coverage, streamline operational aspects and address emerging requirements. It is now proposed to issue a revised set of instructions to banks on the Scheme, consolidating those on agriculture and allied activities. The proposed guidelines include, among others, standardisation of crop season, extension of KCC tenure to six years, alignment of drawing limit with Scale of Finance (SoF) for each crop season and inclusion of expenses on technological interventions. The draft guidelines will be issued shortly.

11. Review of guidelines relating to use of Business Correspondents (BCs) by banks

Business Correspondents have been functioning as critical enablers of last mile access to financial services, particularly in respect of underserved, rural, and remote locations. Reserve Bank had set up a committee, consisting of officials from Reserve Bank, DFS, IBA and NABARD, to comprehensively examine their operations and make suitable recommendations for enhancing their efficiency. Basis the Committee’s recommendations, the related regulatory guidelines are being reviewed, and the draft amendment directions will be placed for public consultations shortly.

12. Enhancement in Collateral free loan limit from ₹10 lakh to ₹20 lakh

With a view to facilitate improved access to formal credit, support entrepreneurial activity and strengthen last mile credit delivery for Micro and Small Enterprises (MSEs) with limited collateral, it has been decided to enhance the limit of collateral free loans to MSEs from ₹10 lakh to ₹20 lakh. The above provisions shall be applicable to all loans to MSE borrowers sanctioned or renewed on or after April 01, 2026. Instructions in this regard will be issued shortly.

IV. Financial Markets

13. Development of corporate bond market

An active derivatives market can facilitate efficient management of credit risks, improve liquidity and efficiency in the corporate bond market and facilitate issuance of corporate bonds across the rating spectrum. An announcement was made in the Union Budget speech delivered on February 1, 2026, that total return swaps on corporate bonds and derivatives on corporate bond indices will be introduced. Accordingly, a regulatory framework to enable the introduction of derivatives on credit indices and total return swaps on corporate bonds will be issued shortly for public feedback.

14. Foreign Exchange Dealings of Authorised Dealers

Banks and standalone primary dealers authorised under FEMA, 1999, access the foreign exchange market for market making, balance sheet management and hedging of risks. The regulatory framework governing the facilities for such Authorised Dealers (ADs) has been reviewed, rationalised and refined in view of the current market practices and requirements, domestically and globally. The revised framework provides these ADs with greater flexibility with respect to foreign exchange products, risk management and platforms. Draft directions in this regard will be issued shortly for public consultation.

15. Review of the Voluntary Retention Route for FPI investment in debt instruments

The Voluntary Retention Route (VRR) was introduced by the Reserve Bank in March 2019 to provide an additional channel for investments by Foreign Portfolio Investors (FPIs) with long-term investment interest in the Indian debt markets. Over the years, the Bank has been recalibrating the Route to improve operational flexibilities and ease of doing business. The VRR has been witnessing active investment by FPIs, and over 80 per cent of the current investment limit of ₹2.5 lakh crore has been utilised. With a view to ensuring predictability about the availability of investment limits under the VRR and to further increase ease of doing business, it has been decided that (a) investments under the VRR shall now be reckoned under the limit for FPI investments under the General Route; and (b) certain additional operational flexibilities will be provided to FPIs investing under the VRR. Necessary directions will be separately issued.

V. Capacity Building

16. Mission Saksham – Capacity Building for the UCB Sector

Primary (Urban) Co-operative Banks (UCBs) are vital institutions for promoting financial inclusion and serving the unbanked. Securing their next phase of growth would depend on developing stronger skills and competencies, along with technical capabilities and operational resilience in them. To serve this objective, the Reserve Bank will soon be launching Mission SAKSHAM (Sahakari Bank Kshamta Nirman)- a sector-wide capacity-building and certification framework. The capacity building of the sector would be implemented through a large number of physical training programmes as well as a scalable learning platform, to cover about 1.40 lakh participants, across all functions. The Reserve Bank shall endeavour to conduct these training programmes at locations close to participating UCBs, with content delivery in regional languages to the extent feasible. The Mission will be pursued in partnership with the Umbrella Organisation of UCBs and National / State Federations.

Minutes of MPC

The 59th Meeting of the Monetary Policy Committee, constituted under Section 45ZB of the Reserve Bank of India Act, 1934, was held during February 4 to 6, 2026.

Accordingly, under Section 45ZL of the Reserve Bank of India Act, 1934, the Reserve Bank published the minutes of the proceedings of the meeting on February 20, 2026, i.e., the fourteenth day after meeting of the MPC. The MPC also reviewed the surveys conducted by the Reserve Bank to gauge consumer confidence, households’ inflation expectations, corporate sector performance, credit conditions, the outlook for the industrial, services and infrastructure sectors, and the projections of professional forecasters. To read more, please click here.

III. Regulation

RBI invites public comments on the draft Amendment Directions on Non-Banking Financial Companies – Branch Authorisation Directions

The Reserve Bank had issued the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Directions, 2025 (hereafter referred as the ‘Master Directions’), on November 28, 2025, which inter alia prescribes regulations on opening and closure of branches of Non-Banking Financial Companies (NBFCs). As announced in the Governor’s Statement on February 06, 2026, the Reserve Bank has published the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026. Consequently, relevant paragraphs of the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025 and the Reserve Bank of India (Housing Finance Companies) Directions, 2025, shall be amended suitably. The comments on the draft Amendment Directions were invited from the Regulated Entities, and other interested parties till February 27, 2026. To read more, please click here.

RBI Issues Amendment Directions on Lending to Micro, Small & Medium Enterprises (MSME) Sector

The Reserve Bank issued the Lending to Micro, Small & Medium Enterprises (MSME) Sector (Amendment) Directions, 2026 on February 9, 2026, modifying certain provisions of the Master Direction - Lending to Micro, Small & Medium Enterprises (MSME) Sector (Updated as on July 23, 2025). These amendments have been carried out to (i) enhance the extant Collateral-Free Loan Limit for Micro and Small Enterprises (MSEs) to ₹20 lakh, and (ii) align with certain regulatory changes that have been notified separately, with the objective of strengthening last mile credit delivery for Micro and Small Enterprises with limited assets to provide as collateral. The amended Directions shall come into effect from April 01, 2026. To read more, please click here.

Review of Lending norms for UCBs

The Reserve Bank, in pursuance of the announcement made in the Statement on Developmental and Regulatory Policies dated February 6, 2026, issued the following draft Amendment Directions for public comments on February 10, 2026, proposing to amend existing Directions issued by the Department of Regulation, RBI: Reserve Bank of India (Urban Co-operative Banks – Concentration Risk Management) - Amendment Directions, 2026; Reserve Bank of India (Urban Co-operative Banks - Credit Facilities) - Amendment Directions, 2026; and Reserve Bank of India (Urban Co-operative Banks - Financial Statements: Presentation and Disclosures) - Second Amendment Directions, 2026. The above draft Amendment Directions propose to rationalise the definition of unsecured advances, enhance the individual loan limits for such advances and revise the aggregate ceiling for such advances by UCBs to 20% of total advances from the extant ceiling of 10% of total assets, enhance the lending limit to nominal members for purchase of consumer durables to ₹2.5 lakh per borrower, deregulate the tenor and moratorium requirements for housing loans for Tier 3 and Tier 4 UCBs, and introduce certain disclosure requirements for the UCBs. To read more, please click here.

RBI invites public comments on the Draft Circular on Lead Bank Scheme (LBS)

The Reserve Bank issued revised guidelines on the Lead Bank Scheme on February 13, 2026, as part of the announcement made in the Statement on Developmental and Regulatory Policies dated February 06, 2026, to streamline the operational aspects, and accordingly, the draft circular on the revised guidelines of the Lead Bank Scheme has been issued for public comments. The revised guidelines aim to finetune the objectives of the Scheme; the structure, membership and agenda of various fora under the Scheme; clear delineation of roles and responsibilities of key functionaries; and provisions to further strengthen the State Level Bankers' Committee and Lead District Manager offices, among others. To read more, please click here.

IV. Publication

RBI Bulletin – February 2026

The Reserve Bank released the February 2026 issue of its monthly Bulletin on February 20, 2026. The Bulletin includes bi-monthly monetary policy statement (February 6, 2026), one speech, three articles and current statistics. The three articles are: I. State of the Economy; II. Union Budget 2026-27: An Assessment; and III. Retail Inflation Volatility in India: Sources, Determinants, and Implications. To read more, please click here.

V. Data Release

Important data released by the Reserve Bank during the  month of February 2026 are as follows:

Edited and published by Brij Raj for Reserve Bank of India, Department of Communication, Central Office, Shahid Bhagat Singh Marg, Mumbai - 400 001. MCIR can be also accessed at https://mcir.rbi.org.in.

Today, the Reserve Bank released the results of its 71st round of the quarterly Order Books, Inventories, and Capacity Utilisation Survey (OBICUS), which was conducted during Q3:2025-26 and covered 1,114 manufacturing companies. The survey¹ provides a snapshot of the demand conditions in India’s manufacturing sector during July-September 2025.

Highlights:

• At the aggregate level, capacity utilisation (CU) in the manufacturing sector increased marginally to 74.3 per cent in Q2:2025-26 from 74.1 per cent in the previous quarter. However, the seasonally adjusted CU (CU-SA) declined by 100 basis points from the previous quarter and stood at 74.8 per cent in Q2:2025-26. Both CU and CU-SA for Q2:2025-26 increased by 10 basis points as compared to their levels in the corresponding quarter of the previous year (Chart 1 and Table 1).

• Manufacturers reported higher growth in new orders during Q2:2025-26 on a sequential (q-o-q) basis. On an annual (y-o-y) basis, the growth continued to remain stable (Chart 2 and Table 2A).

• As a ratio to sales, the finished goods inventory (FGI) remained stable while the raw material inventory (RMI) declined during Q2:2025-26 (Chart 3 and Table 3A).

Note - Please see the excel file for time series data.

ANNEX 1: Data Tables

Note: The methodology for computations of order book growth and inventory to sales ratios is given in the RBI press release dated October 8, 2021 (link: https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=20650). Please also see footnote 2 on direct estimation of RMI since 53rd round of the survey.

¹ The survey responses are voluntary, and the results reflect the views of the respondents, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on October 01, 2025.

Today, the Reserve Bank released the results of January 2026 round of its bi-monthly Rural Consumer Confidence Survey (RCCS)^{1 2}. The survey collects current perceptions (vis-à-vis a year ago) and one year ahead expectations of households, on general economic situation, employment scenario, overall price situation, own income and spending. The survey also collates information on households' current perception and their year ahead expectation on inflation. The latest round of the survey was conducted during January 2-11, 2026, covering 8,909 responses of households in the rural and semi-urban areas across all Indian states and three major UTs.

Highlights:

1. The Current Situation Index (CSI)³ has remained range bound above the neutral level over the last six survey rounds (Chart 1; Table 9).

2. The one-year-ahead outlook has shown steady improvement since the September 2024 round, remaining firmly in the optimistic territory (Chart 1).

3. On a net basis, respondents’ perception on prices and inflation worsened in the latest survey round. However, the share of households reporting no change in prices and inflation has increased (Tables 3 and 4).

4. Households’ current inflation perception increased by 50 bps to 5.1 per cent in current round of the survey. Moreover, their one-year ahead expectation marginally inched up by 10 bps to 6.2 per cent (Table 12).

Note: Please see the excel file for time series data⁴

¹ The rural consumer confidence survey covers both rural and semi-urban areas.

² The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on December 05, 2025.

³ CSI and FEI are compiled with the net responses on five survey parameters viz., general economic situation, employment, income, price level and spending, for the current period (as compared with one year ago) and a year ahead, respectively. CSI and FEI = 100 + Average of Net Responses of the above parameters.

⁴ Unit-level data for previous rounds of the survey are available on the Bank’s ‘Database on Indian Economy’ (DBIE) portal (weblink: https://data.rbi.org.in/DBIE/#/dbie/home) under the head ‘Unit-level Data’.

⁵ ‘Net response’ is the difference between the percentage of respondents reporting optimism and those reporting pessimisms. It ranges between -100 and 100. Any value greater than zero indicates expansion/ optimism and values less than zero indicate contraction/ pessimism.

Today, the Reserve Bank released the results of 34th round of its quarterly Bank Lending Survey (BLS)¹, which captures qualitative assessment and expectations of major scheduled commercial banks on credit parameters (viz., loan demand as well as terms and conditions of loans) for major economic sectors². The latest round of the survey, which was conducted during Q3:2025-26, collected senior loan officers’ assessment of credit parameters for Q3:2025-26 and their expectations for Q4:2025-26 and Q1, Q2 of 2026-27.

Highlights:

A. Assessment for Q3:2025-26

• Bankers assessed higher loan demand from most of the sectors of the economy during Q3:2025-26 as compared to the previous quarter (Chart 1 and Table 1).

• Majority of the responding bankers indicated easier loan terms and conditions (Table 2).

B. Expectations for Q4:2025-26

• Bankers’ outlook on overall loan demand improved for Q4:2025-26, mainly driven by manufacturing, infrastructure, services, and retail/personal loans sectors (Table 1).

• Overall, easy terms and conditions for loans are expected to prevail during the quarter (Table 2).

C. Expectations for Q1:2026-27 and Q2:2026-27

• Responding bankers continue to expect increased loan demand and easier loan terms and conditions from all major sectors till Q2:2026-27 (Table 3).

Note: Please see the attached excel file for detailed time series data.

¹ The results of 33rd round of the BLS with reference period as July-September 2025 were released on the RBI website on October 01, 2025. The survey results reflect the views of the respondents, which are not necessarily shared by the Reserve Bank.

² The survey questionnaire is canvassed among major 30 SCBs, which together account for over 90 per cent of credit by SCBs in India.

³ Net Response (NR) is computed as the difference of percentage of banks reporting increase/optimism and those reporting decrease/pessimism in respective parameter. The weights of +1.0, 0.5, 0, -0.5 and -1.0 are assigned for computing NR from aggregate per cent responses on 5-point scale, i.e., substantial increase/ considerable easing, moderate increase/ somewhat easing, no change, moderate decrease/ somewhat tightening, substantial decrease/ considerable tightening for loan demand/loan terms and conditions parameters respectively. NR ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. Increase in loan demand is considered optimism (Table 1), while for loan terms and conditions, a positive value of net response indicates easy terms and conditions (Table 2).

Today, the Reserve Bank released the results of January 2026 round of its bi-monthly urban consumer confidence survey (UCCS)¹. The survey collects current perceptions (vis-à-vis a year ago) and one year ahead expectations of households on general economic situation, employment scenario, overall price situation, own income and spending. The latest round of the survey was conducted during January 2-11, 2026, covering 5,933 respondents across 19 major cities.

Highlights:

1. Consumer confidence for the current period changed marginally - the Current Situation Index (CSI)² stood at 98.1 vis-à-vis 98.4 in the previous round (Chart 1).

2. Consumer confidence for the year ahead ticked downward, owing mainly to lower expectations on general economic conditions, income and price level compared to the previous round. Thus, the Future Expectations Index (FEI), though in the optimistic zone, dropped by 2.2 points to 123.4 (Chart 1; Tables 1, 3 and 5).

3. After showing improvement for three consecutive rounds, households’ current perception on economic situation worsened. The future outlook also declined by 3.6 points, however remained in the optimistic zone (Table 1).

4. Households’ sentiments on current earning remained stable. However, their year-ahead expectations moderated (Table 5).

5. Household’s’ sentiments on price and inflation deteriorated for both the time horizons (Tables 3 and 4).

Note: Please see the excel file for time series data³

¹ The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on December 05, 2025.

² CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period (as compared with one year ago) and a year ahead, respectively. CSI and FEI = 100 + Average of Net Responses of the above parameters.

³ Unit-level data for previous rounds of the survey are available on the Bank’s ‘Database on Indian Economy’ (DBIE) portal (weblink: https://data.rbi.org.in/DBIE/#/dbie/home) under the head ‘Unit-level Data’.

⁴ ‘Net response’ is the difference between the percentage of respondents reporting optimism and those reporting pessimisms. It ranges between -100 and 100. Any value greater than zero indicates expansion/ optimism and values less than zero indicate contraction/ pessimism.

Today, the Reserve Bank released the results of 112th round of its quarterly industrial outlook survey (IOS). The survey¹ encapsulates qualitative assessment of the business climate by Indian manufacturing companies for Q3:2025-26 and their expectations for Q4:2025-26 as well as outlook on select parameters for the subsequent two quarters. A total of 1,453 companies responded in this round of the survey² conducted during October-December 2025.

Highlights:

A. Assessment for Q3:2025-26

• Manufacturers’ optimism on demand conditions improved for Q3:2025-26 as compared to the previous quarter, as reflected in their assessment on production, order books and capacity utilisation (Table A).

• Responding firms reported higher pressure from raw material costs and wage bill. Manufacturers’ sentiments turned pessimistic with regard to growth in selling prices and profit margins.

• Overall business sentiments in the manufacturing sector moderated; the business assessment index (BAI) decreased to 107.8 in Q3:2025-26 from 110.6 in the previous quarter (Chart 1).

B. Expectations for Q4:2025-26

• Manufacturers outlook for Q4:2025-26 remains positive, albeit with some moderation, reflecting a weaker outlook on production, order books, capacity utilisation and exports.

• Manufacturing firms expect cost pressures to ease, selling prices to rise at a lower rate and profit margin to soften.

• Business expectations index moderated in Q4:2025-26, reflecting guarded sentiment among manufacturers (Chart 1).

C. Expectations for Q1:2026-27 and Q2:2026-27

• Demand conditions are expected to improve during H1:2026-27 (Table B).

• Manufacturers expect input cost pressures to persist, but they also anticipate better pricing power in terms of higher growth in selling prices.

Note: Please see the excel file for time series data

¹ The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank.

² Results of the previous survey round were released on the Bank’s website on October 01, 2025.

³ Net Response (NR) is the difference between the percentage of respondents reporting optimism and those reporting pessimism. It ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. In other words, NR = (I – D), where I is the percentage response of ‘Increase/optimism’, and D is the percentage response of ‘Decrease/pessimism’ and E is the percentage response as ‘no change/equal’ (i.e., I+D+E=100). For example, increase in production is optimism whereas decrease in cost of raw material is optimism.

⁴ For each survey round, two summary indices are computed – one based on assessment [viz., Business Assessment Index (BAI)] and another based on expectations [viz., Business Expectations Index (BEI)]. Each index is a composite indicator calculated as a simple average of nine business parameters, where each parameter is derived as a weighted net response, weights being the share of industry groups in gross value added (GVA). The nine parameters considered are: (1) overall business situation; (2) production; (3) order books; (4) inventory of raw material; (5) inventory of finished goods; (6) profit margins; (7) employment; (8) exports; and (9) capacity utilisation. BAI/BEI gives a snapshot of the business outlook in every quarter and takes values between 0 and 200, with 100 being the threshold separating expansion from contraction.

Today, the Reserve Bank released the results of 47th round of its quarterly Services and Infrastructure Outlook Survey (SIOS) conducted during Q3:2025-26. This forward-looking survey¹ captures qualitative assessment and expectations of Indian companies engaged in the services and infrastructure sectors on a set of business parameters relating to demand conditions, price situation and other business conditions. In the latest round of the survey², 1,004 companies provided their assessment for Q3:2025-26 and expectations for Q4:2025-26 as well as outlook on key parameters for the subsequent two quarters.

Highlights:

A. Services Sector

Assessment for Q3:2025-26

• Service sector firms’ assessment on overall business situation and their turnover during Q3:2025-26 remained positive though tempered a bit from that in the previous quarter (Chart 1 and Table A).

• Firms assessed moderation regarding pressures from input costs and salary outgo during Q3:2025-26.

• Sentiments on growth in selling prices and profit margins moderated but remained positive.

Expectations for Q4:2025-26

• Respondents remained optimistic on demand conditions in Q4:2025-26, though their optimism regarding overall business situation, turnover and job landscape is marginally lower vis-à-vis the previous quarter (Chart 1 and Table A).

• Pressure emanating from input costs is likely to rise during Q4:2025-26; however, pressure stemming from finance costs is expected to ease.

• Services firms expect selling prices to increase; profit margin is likely to remain positive during Q4:2025-26.

Expectations for Q1:2026-27 and Q2:2026-27

• Services companies expect improvement in the overall business situation, turnover and employment in the first half of the next financial year (Table C).

• Input cost pressures are likely to persist for services firms; with sequential rise in selling prices.

• Responding services firms reported that with their existing resources they were able to provide 10.1 per cent additional services during Q2:2025-26 (Table S14).

B. Infrastructure Sector

Assessment for Q3:2025-26

• Infrastructure companies reported positive assessment of overall business situation and their turnover, though their sentiments moderated vis-à-vis the previous quarter (Chart 2 and Table B).

• Sentiments on both full-time and part-time employment improved.

• Infrastructure firms gauged higher pressures stemming from input costs, salary outgo and cost of finance.

• Responding firms reported lower growth in selling prices and profit margins as compared to the previous quarter.

Expectations for Q4:2025-26

• Infrastructure firms remain highly optimistic on overall business situation and demand conditions in Q4:2025-26 (Chart 2 and Table B).

• Cost pressures are likely to rise further, and infrastructure firms expect improvement in the growth of selling prices and profit margins.

Expectations for Q1:2026-27 and Q2:2026-27

• Responding firms expect sequential improvement in demand conditions till Q2:2026-27 (Table D).

• Input cost pressures are likely to persist in the near term and growth in selling prices are expected to remain at an elevated level.

Summary of Net Responses³ on Survey Parameters