Foreign exchange reserves and bank credit growth recorded in RBI Bulletin

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RBI Bulletin: Reserve and Credit Growth

Highlights

India's total foreign exchange reserves rose by 10,512 million U.S. dollars to a new high in the week ending July 31, 2026.
As of July 15, 2026, bank credit in India stands at ₹21,733,383 crore, recording an annual growth of 17.7 percent.
Between July 27 and August 2, 2026, RBI's liquidity system consistently shows net absorption, reaching ₹245,912 crore on July 31.

This article was translated from the original. Read the original version by our correspondent here.

Main Figures from the Weekly Statistical Supplement

According to the RBI Weekly Statistical Supplement release, India's total foreign exchange reserves increased by ₹24,233 crore, or 10,512 million U.S. dollars, in the week ending July 31, 2026. Foreign currency assets rose by ₹21,541 crore to ₹5,388,865 crore, while gold reserves increased by ₹4,597 crore to ₹999,586 crore.

The same supplement notes that loans and advances to state governments under RBI's liabilities and assets decreased from ₹24,197 crore on July 24, 2026, to ₹17,100 crore on July 31, 2026. The data also states that figures are provisional and minor differences may occur due to rounding.

Figures for scheduled commercial banks' operations in India show total deposits at ₹26,284,574 crore as of July 15, 2026. Bank credit stands at ₹21,733,383 crore, with an annual growth of 17.7 percent, while total deposits show a yearly increase of 12.7 percent.

Money stock M3 stands at ₹31,646,426 crore as of July 15, 2026. This marks a 0.8 percent decrease over the fortnight, but a 3.1 percent increase so far in the 2026-27 fiscal year and a 12.5 percent annual growth.

Liquidity Operations and Impact on the Banking Sector

Between July 27 and August 2, 2026, RBI's liquidity operations system consistently shows net absorption. Net absorption stood at ₹245,912 crore on July 31, 2026, and ₹202,669 crore on August 1, 2026, indicating a surplus liquidity situation in the banking system.

The data also shows that non-food credit remains the main driver of bank credit expansion, with an annual increase of ₹3,20,1753 crore as of July 15, 2026. Growth in currency with the public, time deposits, and bank credit to the commercial sector indicates that both credit flow and savings accumulation are continuing in the banking system.

The supplement also notes that the impact of a non-bank's merger with a bank in 2023 is included in the banking data. Additionally, under the Banking Laws (Amendment) Act, 2025, from December 15, 2025, the definition of a fortnight is revised to the 15th and last calendar day of the month instead of alternate Fridays, affecting the interpretation of comparative data going forward.

Our earlier report assessed the foreign currency inflows raised by banks under the RBI's concessional swap facility, which recorded a total of $40,816 million raised as of July 31, 2026, with the largest contribution from FCNR(B) deposits. That article noted that as this window remains open until September 30, 2026 (FCNR(B)) and December 31, 2026 (OFCBs/ECBs), further changes in inflows are possible, which could impact the banking system's foreign currency liquidity.

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