Week ending 11th April 2026

# 1 Markets

1.1 After a shaky start, the market delivered its best weekly performance in over five years, with the Nifty 50 surging nearly 6% to reclaim the 24,000 level and the Sensex jumping over 4,200 points to end near 77,550.The rally was ignited by a sharp shift in global sentiment as hopes of a US-Iran ceasefire led to cooling crude oil prices, providing massive relief to the energy-sensitive Indian economy. Outcome of fragile truce talks in Islamabad this weekend will influence markets’ behaviour in the coming weeks.

1.2 The US equity market followed a similar trajectory, shaking off early-week jitters to record significant gains by the close on Friday. Market sentiment shifted from caution to optimism with indexes surging over 3% for the week, as a temporary US-Iran ceasefire eased energy supply fears, allowing the S&P 500 to erase most of its March losses and Nasdaq Composite jumping 4.88%.

1.3 Bond yields on both sides of the Atlantic cooled significantly as geopolitical de-escalation and a status quo RBI policy provided a much-needed reprieve to fixed-income investors. The 10-year G-Sec yield retreated from multi-year highs to settle near 6.93%, driven by the RBI’s neutral policy stance and a sharp drop in crude oil prices that eased domestic inflation fears.

1.4 US Treasury yields saw a decisive relief rally with the 10-year yield falling 13 basis points to 4.31%, as a dovish interpretation of Fed commentary and a safe-haven bid outweighed a surprisingly strong March jobs report.

# 2 RBI

2.1 RBI Monetary Policy Committee — April 2026

A.Policy:

1. Repo Rate unchanged at 5.25%, with the SDF Rate at 5.00% and the MSF Rate & Bank Rate at 5.50%. The monetary policy stance remains Neutral. Oil prices and inflationary pressures limit room for rate cuts. (After cumulative rate cuts of 126 bps. In 2025)
2. GDP growth for FY projected lower at 6.9% – Net change is a downward revision of ~0.7 percentage points for the coming fiscal year (from 7.6% in FY26 to 6.9% in FY27), primarily driven by geopolitical headwinds from the Iran-US conflict.
3. CPI inflation projected at 4.6% and core inflation projected at 4.4% for FY27
   1. Introduced core inflation projections for the first time;
   2. Headline vs core inflation targeting—Policy debate remains unresolved though globally, headline remains the preferred benchmark.
   3. Monetary policy has limited control over food prices (supply-driven), complicating reliance on headline inflation.
   4. Inflation is currently well-behaved, but RBI is enhancing transparency via core projections while navigating structural challenges from food-driven volatility.
   5. B. Regulatory Directives -:

1. Easing CRAR computation by allowing inclusion of quarterly profits without restrictive conditions-

1. Currently, banks (excluding RRBs) can count quarterly net profits toward CRAR only if their quarterly NPA provisioning doesn’t deviate more than 25% from the prior year’s four-quarter average — a condition now proposed to be dropped.
2. Under the new framework, banks may include quarterly profits in CET1 capital using a revised formula that factors in cumulative profit/loss across quarters of the fiscal year and the average dividend paid over the preceding three years.
3. The change doesn’t alter how net profit is computed — only how it feeds into capital adequacy measurement, yielding a more accurate picture of a bank’s true capital position.

5. Scrapping Investment Fluctuation Reserve [IFR] for banks (incl. Local Area Banks; excl. SFBs, PBs, RRBs).
   1. Banks already hold capital for market risk and follow updated valuation/classification norms.
   2. Shift to full MTM accounting reduces the need for a separate fluctuation buffer.
   3. Impact: Potential release of ₹35,000–40,000 crore of bank capital.
6. Rationalisation of board governance norms
   1. Replace rule-heavy approach with a principles-based framework, clearly separating board approvals from delegated matters; refocus boards on strategy and risk oversight.
   2. Delegate routine/operational decisions to committees/management to reduce overload and improve quality of board engagement.
   3. Tighten governance oversight in response to recent developments at HDFC Bank (including Atanu Chakraborty’s exit).
   4. Consolidate supervisory instructions into Master Directions for greater clarity.
7. Measures to boost MSME participation in TReDS (Trade Receivables Discounting System) by simplifying onboarding without detailed due diligence.
8. Expansion of participation in the term money market to deepen financial markets – Participation of non- bank participants viz., AIFIs, NBFCs, including housing finance companies, companies, etc. proposed to be allowed to enhance the borrowing limit in the term money market for standalone primary dealers. (presently only banks and PDs are allowed)

The RBI chose stability over stimulus — holding rates steady while geopolitical risks (West Asia conflict, oil prices) remain elevated, signalling that the next move (cut or hike) will be purely data-driven.

2.2 RBI on Friday proposed to change scale-based regulations for NBFCs – key changes

• Proposes replacing the current complex, discretionary framework with a clear asset-based threshold for identifying upper-layer NBFCs.
  • Any NBFC with assets ≥ ₹1 trillion will automatically qualify as an upper-layer entity; threshold to be reviewed every 5 years.
  • Eliminates subjective scoring and “top 10” methodology, improving transparency and consistency in classification.
  • Government-backed entities (e.g., Power Finance Corporation) will now be treated on par with private NBFCs—ending earlier exemptions.
• Upper-layer NBFCs will continue to face stricter supervision, reflecting systemic importance.
• Upper-layer NBFCs are required to list by regulatory timelines
  • Tata Sons is included in prior upper-layer lists, but its NBFC/CIC status and listing obligation remain unresolved pending RBI’s decision.
  • Given its large asset base (~₹1.7–1.9 trillion), new norms increase likelihood of regulatory pressure on Tata Sons to go public.
• Broader inclusion aims to strengthen risk-based supervision, capture systemic risks (leverage, interconnectedness), and reduce regulatory arbitrage.

Overall, Reserve Bank of India’s shift to a clear asset-based framework strengthens transparency and systemic oversight, while leaving key implementation ambiguities—especially around Tata Sons—still unresolved.

2.3 RBI issued revised Guidelines on April 9, for Faster Cross-Border Inward Payment

India is among the world’s top recipients of inward remittances. The RBI identified the key bottleneck as the delay at the beneficiary bank stage — the gap between receiving a payment and crediting it to the customer’s account. These guidelines directly target that last-mile lag.

What Banks must do now

• Notify customers immediately upon receiving an inward remittance message. If messages arrive after banking hours, customers must be informed at the start of the next business day.
• Credit funds on the same business day if received during forex market hours. Payments received after market hours must be credited the next business day, subject to FEMA compliance.
• Reconcile nostro accounts more frequently — at near real-time or periodic intervals, with gaps not exceeding one hour instead of the current practice of end-of-day reconciliation.
• Provide digital interfaces for customers to submit documents and track forex transactions.

The directive is part of RBI’s Payments Vision 2025 and the G20 roadmap, targeting cross-border payments that are faster, cheaper, and more transparent — bringing India’s systems in line with global standards.

2.4 RBI on Wednesday released NPA data on commercial banks –

• Gross NPAs declined to 2.0% (Dec 2025) vs 2.5% YoY, marking continued multi-quarter improvement
  • NPAs fell across sectors — retail (1.0%), services (1.7%), industry (1.8%), agriculture (5.7%)
  • Drivers: Sustained recoveries, upgrades, and write-offs
• RBI sees no systemic stress despite West Asia-related risks; only sector-specific pressures expected
• Bank credit growth accelerated to 13.8% YoY (Mar 2026) vs 11% YoY last year
  • Foreign banks led (14.7%), with PSBs contributing highest incremental credit; private banks gaining share recently
  • Adjusted non-food credit growth rose to 13.5% YoY (Q4FY26) vs 10.8% YoY last year
• Excess SLR holdings declined to 6.3% of NDTL (vs 7.3%), as banks redeployed funds to support credit growth

Overall, the banking system reflects strong balance sheet health and accelerating credit momentum, with risks contained despite external uncertainties.

2.5 RBI released draft consultation paper proposing safeguards for digital frauds – key points:

• Introduce lagged credit (except low-value payments). – To Create friction/delay to detect, pause, and contain frauds, while improving user protection.
• Extra authentication for high-value transactions (esp. vulnerable users).
• Enhanced scrutiny for large incoming credits.
• Enable customer-driven transaction controls.

Rationale:

• Digital payment frauds have surged sharply (₹551 cr in 2021 → ₹22,931 cr in 2025; cases ~10x). – Predominantly authorised push-payment (APP) fraud driven by social engineering, not system hacks.

RBI is shifting from speed-first to safety-first digital payments by embedding targeted friction to curb rising APP frauds.

2.6 Supreme Court [SC] judgement last week on fraud classification of accounts by banks:

• SC clarified and upheld the RBI’s 2024 Fraud Risk Management Directions, which prescribe show-cause notices, written replies, and reasoned orders.

Judgement

No mandatory personal/oral hearing required before classifying a borrower account as fraud subject to banks following RBI’s 2024 fraud management directions.

• Natural justice is satisfied through show-cause notice + access to evidence + written representation + reasoned order.
• Forensic audit reports must be shared with borrowers (with limited redactions to protect third-party interests).

 

Implications

• Faster fraud detection & reporting to enforcement agencies.
• Reduced litigation on procedural grounds; courts are likely to focus on quality of decision-making, not absence of hearings.

 

A pro-bank, efficiency-driven ruling that streamlines fraud classification while preserving core due process—tilting the system toward speed and enforceability over procedural formality.

# 3 SEBI

3.1 SEBI on Friday clarified that AMCs and their subsidiaries must comply with strict broad-based investor norms when managing/advising AIFs.

• Compliance is at the scheme level, not fund level, each AIF scheme must independently meet diversification criteria.
• AIFs are treated as “pooled assets” under mutual fund rules, requiring ≥20 investors and ≤25% holding per investor.
• Market participants argue the guidance effectively creates a new rule without clearly defining “pooled assets.”
• Master-feeder structures tightened: both master and feeder funds must individually meet broad-based norms, removing prior flexibility.
• No FPI-style exemptions for domestic institutions (banks, insurers, PFs); they cannot use look-through benefits.
• Overall, SEBI signals a stricter stance to prevent circumvention of diversification norms via structures or institutional participation.

SEBI’s clarification reinforces a look-through, scheme-level discipline, effectively tightening diversification norms and closing structuring arbitrage for AIFs.

# 4 Economy

4.1 World Bank in its report released last week has revised India Growth Outlook

• FY27 growth forecast revised to 6.6% (from 6.3% earlier); still < RBI estimate of 6.9%
• Growth moderates from 7.6% in FY26 (7.1% FY25) due to global/geopolitical headwinds
• Strong domestic demand + exports underpin outlook; GST cuts to support consumption in early FY27; FTAs (EU, UK) expected to boost trade, incomes, and consumption over time

Key Risks / Headwinds

• West Asia conflict → high energy prices → inflation pressures; Investment growth to slow due to uncertainty & rising input costs

India remains among fastest-growing major economies, but near-term risks tilted downside from geopolitics and energy prices.

4.2 Asian Development Bank [ADB] last week raised India GDP forecast to 6.9% (from 6.5%)

• Growth to ease from 7.6% in FY26 due to global uncertainty (West Asia conflict), higher energy prices, and volatile trade/flows
• Growth expected to rebound to 7.3% in FY28 on stronger consumption, public capex, and improved external environment
  • Key growth drivers: Private consumption (rising real incomes, potential salary/pension revisions) and resilient private investment supported by policy and reforms
  • Manufacturing boost: Gains expected from trade agreements with EU, US, and New Zealand, aiding export competitiveness
  • Policy support: Fiscal/monetary backing plus reforms (labour flexibility, GVC integration, power sector, clean energy) underpin medium-term outlook

India’s growth remains resilient despite external headwinds, with domestic demand and reforms anchoring momentum.

4.3 Moody’s retains India rating at Baa3 (BBB-) with stable outlook

• FY27 GDP seen moderating to ~6% due to Middle East conflict
• Fiscal outlook: Gradual consolidation; debt remains high (>80% of GDP); risks from revenue-eroding measures
• External sector risks:
  • Wider current account deficit from higher import costs (energy, fertilizers)
  • Exports are steady but vulnerable to Middle East demand disruption
  • Remittance vulnerability: ~37–40% inflows from Middle East; conflict could hit consumption & buffers
• Growth support: Infra push + gradual pickup in private investment + trade diversification
• Downgrade risks: Weaker growth, fiscal slippage, or renewed financial sector stress

Overall, Moody’s signals resilience in India’s fundamentals but flags rising external and inflation risks as key constraints on sustained macro stability.

4.4 As per S&P Global HSBI PMI release last week

• Services PMI eased to 5 (Mar) from 58.1—14-month low, but still well above 50 (expansion) and long-term average (54.4).
• This follows a bigger fall in the manufacturing PMI to 53.9 in March from 56.9, the lowest level in nearly four years.

• Combined with weak manufacturing, Composite PMI fell to 57 (from 58.9) ~3.5-year low.
  • Demand softens domestically: New business growth weakest since Jan 2025, hit by weak market conditions, lower domestic demand, and competition.
  • International orders surged to near-record levels (second highest since 2014). West Asia conflict dampened demand, tourism, and overall activity.
  • Input costs rose at a 45-month high; output prices also increased (7-month high). Firms absorbed part of cost increases, as price hikes lagged input inflation (widest gap since Jul 2023).

Resilient but losing momentum—India’s services growth is holding up, yet squeezed by weak domestic demand, rising costs, and external headwinds.

4.5 India’s nuclear fuel self-reliance achievement

India moved closer to nuclear fuel self-reliance as its prototype fast breeder reactor in Tamil Nadu achieved criticality on 6 April 12, 2026.

• India is set to become only the second country after Russia to run a commercial fast breeder reactor. Producing fuel more than it consumes —while major economies like the US, France, UK, Japan, and China haven’t operationalised it successfully.

• India’s prototype fast breeder reactor achieving criticality marks a shift from research to real, sustained nuclear reaction capability.
• Fully designed and developed within India—strengthening technological self-reliance in a strategic sector.

• Enables production of Uranium-233 from thorium, unlocking India’s vast thorium reserves and reducing reliance on imported uranium.

A rare combination of technological prestige, energy security, and clean power progress—making it a major strategic win for India.