RBI Grade B Current Affairs — 14 September 2026

The RBI's Monetary Policy Committee unanimously held the repo rate at 5.25 percent with a neutral stance in its first bi-monthly meeting for FY 2025-26, chaired by Governor Sanjay Malhotra. The SDF rate stays at 5 percent and the MSF rate and Bank Rate at 5.50 percent. RBI projects FY26 real GDP growth at 6.9 percent, down from FY25's 7.6 percent, and CPI inflation at 4.6 percent, citing West Asia conflict and El Niño as upside inflation risks.

The MPC decision to hold rates reveals how the LAF corridor works as a transmission mechanism. The repo rate — the rate at which RBI lends overnight to banks — sits at the centre of the Liquidity Adjustment Facility corridor. The SDF (Standing Deposit Facility) is the floor at 5 percent, where banks park excess liquidity with RBI without collateral. The MSF (Marginal Standing Facility) is the ceiling at 5.50 percent, where banks borrow emergency overnight funds against government securities. The 50-basis-point corridor between SDF and MSF anchors all short-term money-market rates.

A neutral stance signals that the MPC sees risks balanced between growth and inflation — it is neither biased toward cutting (accommodative) nor hiking (withdrawal of accommodation). This is critically different from the previous 'withdrawal of accommodation' stance, and the examiner frequently tests this distinction.

The GDP projection cut from 7.6 percent (FY25) to 6.9 percent (FY26) reflects the drag from geopolitical uncertainty — higher energy prices, freight costs, and supply-chain disruptions from the West Asia conflict. The 4.6 percent CPI projection stays above the 4 percent target midpoint, explaining why the MPC did not cut despite growth concerns. RBI's exchange rate policy — market-determined rates with intervention only to smooth disruptive volatility, not to target any specific level — is a recurring static concept tested across all three exams.

Prime Minister Modi conducted 15 formal bilateral meetings over three days during the BRICS Summit hosted in New Delhi in September 2026, plus additional pull-aside conversations with visiting leaders. India, holding the BRICS chair for 2026, used the summit to advance strategic and economic partnerships simultaneously. The meetings covered a broad range of partners, reflecting India's intent to leverage multilateral gatherings for bilateral diplomatic output at scale.

BRICS — originally Brazil, Russia, India, China, South Africa — expanded in 2024 to include Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, making it BRICS+. India assumed the BRICS chairship for 2026, which means New Delhi sets the agenda, hosts the summit, and shepherds the year's working group outcomes.

When a country chairs a major multilateral forum, the host leader gains a structural diplomatic advantage: every attending head of state or government must come to the host capital. PM Modi's 15 bilaterals in 72 hours illustrate how India converts multilateral hosting duties into bilateral diplomatic capital — a pattern visible at G20 2023 (New Delhi), SCO, and QUAD summits.

For exam purposes, understand three layers: (1) BRICS membership and expansion — who joined in 2024 and when; (2) India's role as 2026 chair — the privileges and responsibilities that entails; (3) the strategic implication — using multilateral platforms to advance bilateral agendas, particularly with countries where standalone summits may be diplomatically difficult (e.g., China or Iran). The BRICS framework also increasingly touches RBI-relevant themes: the push for trade settlement in local currencies, a potential BRICS payment system to reduce dollar dependence, and discussions around a BRICS development bank (New Development Bank, est. 2014, HQ Shanghai).