RBI Circulars are an important part of the current affairs preparation for candidates appearing for RBI Grade B and other banking and regulatory body exams. The July 2026 RBI Circulars cover important topics such as bank governance, financing of independent units of large infrastructure projects, Specified Non-Financial Assets (SNFA), Special Rupee Vostro Accounts (SRVA), and the Financial Inclusion Index.
Attempting an RBI Circulars July 2026 Practice Quiz can help candidates revise these topics, check their understanding, and identify areas that need more attention. Candidates can also download the RBI Circulars July 2026 Practice Quiz PDF for quick revision.
What are the RBI Circulars covered in July 2026?
The July 2026 RBI Circulars discussed in the session cover important regulatory and banking concepts. These include governance directions for banks, financing of independent units of large infrastructure projects, resolution of stressed assets, treatment of Specified Non-Financial Assets, Special Rupee Vostro Accounts, and the Financial Inclusion Index for March 2026. These topics are useful for RBI Grade B preparation, especially for the General Awareness and Finance sections.
Download RBI Circulars July 2026 Practice Quiz PDF
The RBI Circulars July 2026 Practice Quiz PDF covers the important regulatory updates issued by the Reserve Bank of India during July 2026.
| Particulars | Link |
|---|---|
| RBI Circular Quiz PDF | Download Free PDF |
| Check 2026 RBI Circular Details | Check Details |
Attempt the RBI Circulars July 2026 Quiz
The RBI Circulars July 2026 Quiz helps candidates test their understanding of the latest RBI circulars through exam-oriented MCQs.
1. On what date did RBI release the unified governance directions for Commercial, Small Finance, Local Area, and Payment Banks?
2. What was the primary problem the new governance directions sought to address?
3. Under the rationalised governance framework, into how many broad categories has RBI classified board-related matters?
4. Which of the following is NOT one of the three categories into which board matters have been rationalised?
5. Under RBI’s governance principles, the Board must clearly articulate all of the following EXCEPT:
6. Who holds primary responsibility for setting the agenda of Board meetings under the new governance direction?
7. How many broad policy heads are listed in Appendix I of the governance directions?
8. Which of the following is included among the 19 Board policy heads requiring mandatory Board approval?
9. Which of the following matters can be delegated by the Board under the new governance directions?
10. The new governance directions apply uniformly (with a unified approach) to which categories of banks?
11. What is the core objective of rationalising Board-related operational matters?
12. Which of the following remains a core strategic responsibility of the Board that the new directions seek to protect from operational dilution?
13. Management’s obligation regarding information flow to the Board, as per the new directions, is to ensure:
14. Auditor appointment and remuneration policy falls under which category as per the governance directions?
15. Digital banking and IT policy, as per the governance directions, requires:
16. The Credit Facilities Amendment Direction relating to financing of independent units of large projects became effective from:
17. The amendment on financing independent project units applies to which entities?
18. Under the RBI amendment, an independent unit of a larger project may be financed as a separate project provided it:
19. Under the new flexibility, an independent unit of a large project can be financed as a separate project if it:
20. Which of the following is a mandatory condition for treating an independent unit as a separate project for financing purposes?
Quiz Summary
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What is the RBI governance direction discussed in July 2026?
The RBI governance directions focus on improving the way Boards of Directors manage and oversee banks. The framework aims to ensure that the Board can focus on important areas such as business strategy, financial soundness, risk management and corporate governance. At the same time, some operational matters can be delegated to suitable persons within the organisation. However, delegation does not remove the Board’s ultimate responsibility for the bank.
- Matters that must be approved by the Board
- Matters that may be delegated
- Matters requiring initial Board approval, after which subsequent review may be delegated
What are the key areas under the Board’s oversight?
The Board continues to exercise oversight over the key strategic and risk-related areas of a bank. The objective is to ensure that important decisions remain under proper supervision while routine matters can be handled at the appropriate level. Risk management, financial soundness and corporate governance remain important responsibilities of the Board. Candidates should focus on these areas while revising the governance-related RBI circular.
- Risk management
- Financial soundness
- Business strategy
- Corporate governance
- Compliance
- Internal organisation
- Governance structure
- Key personnel decisions
- Exposure to related entities
What are the 19 policy areas requiring Board approval?
The RBI framework identifies 19 Board policy heads where prior Board approval is required. These policies cover important areas related to banking operations, risk, technology, customer service and governance. The Board cannot simply delegate every matter related to these policies. Candidates preparing for RBI Grade B should revise the examples discussed in the circular carefully.
- Credit-related policy
- Investment-related policy
- Risk management policy
- Outsourcing policy
- Digital banking policy
- Information technology policy
- Responsible business and lending conduct policy
- Banking outlet and other channel policy
- Auditor appointment and remuneration
- Compensation policy
- Interest rate policy
- Know Your Customer (KYC) policy
Can some Board functions be delegated?
Yes, certain matters can be delegated to competent persons within the organisation. This allows the Board to focus on strategic matters instead of being involved in every operational decision. However, delegation does not mean that the Board is free from its overall responsibility. The Board continues to maintain oversight of the delegated functions.
- Investment portfolio matters
- Doorstep banking
- Cybersecurity risk-related matters
- Significant cyber incidents
- Customer service matters
What is the RBI update on financing independent units of large infrastructure projects?
The RBI has provided greater flexibility in financing large infrastructure projects that are divided into multiple independent units. Earlier, there could be confusion about whether the entire project should be treated as one unit or whether its independently operational parts could be financed separately.
Under the updated framework, if a large project is divided into separate units and each unit can operate independently, a bank may treat and finance each unit as a separate project. However, this facility is available at the bank’s discretion and the borrower cannot demand separate treatment.
What are the conditions for financing an independent unit separately?
An independent unit can be financed separately only when it meets the required conditions:
- Separate financial closure: Each unit must have its own financial closure, meaning its financing arrangements must be finalised separately.
- Independent viability: The unit should be independently viable and capable of operating on its own.
- Sufficient cash flows: The unit should be able to generate sufficient cash flows to repay or service the loan.
- Bank’s discretion: The decision to treat a unit separately rests with the bank. The borrower cannot claim separate financing as a right.
- Effective date: The amendment is effective from 15 July 2026.
Simple example
Suppose a 400 MW solar power project is divided into four separate 100 MW units. If each 100 MW unit can operate independently, has its own financial closure, and can generate enough revenue to repay its loan, the bank may finance each 100 MW unit as a separate project. This allows financing to be aligned with the actual structure and viability of the infrastructure project.
What is a Specified Non-Financial Asset (SNFA)?
A Specified Non-Financial Asset (SNFA) is an asset such as land or a building acquired by a bank while recovering dues from a borrower. Banks generally deal with financial assets such as loans and investments, rather than immovable property.
However, when a borrower defaults and the bank acquires the collateral during recovery, the acquired land or building can become an SNFA. The framework explains how such assets should be acquired, valued, managed and disposed of.
- Example of SNFA
- Suppose a bank gives a loan to a borrower against land and building as collateral. If the borrower fails to repay the loan and the bank takes possession of the property during recovery, the land and building acquired by the bank becomes a Specified Non-Financial Asset.
What is the maximum disposal period for an SNFA?
The maximum disposal period for an SNFA is 7 years. A bank can decide its own timeline for disposing of the asset based on its internal policy, but the holding period cannot exceed seven years. This is an important factual point for examination preparation. Candidates should remember the number 7 years while revising the July 2026 RBI updates.
- Maximum disposal period: 7 years
- The bank must dispose of the SNFA within the permitted period.
- The bank should have a policy covering SNFA limits and disposal.
How is an SNFA valued at the time of acquisition?
At the time of acquisition, the value of an SNFA is determined using the lower of two values. These are the net book value of the relevant exposure and the distressed sale value of the asset. The distressed sale value reflects the value that may be obtained under stressed selling conditions. The transcript also highlights the role of external valuers in determining the distressed sale value.
SNFA valuation formula: Acquisition value of SNFA = Lower of:
- Net Book Value of the extinguished exposure
- Distressed Sale Value
The distressed sale value is determined with the help of two external valuers.
How is income from SNFA treated?
The RBI update also explains the treatment of income related to an SNFA. Unrealised accrued interest or charges should not be recognised merely because the bank has acquired an SNFA. If such income has already been recognised, it needs to be reversed as per the applicable provisions. Income earned from the SNFA itself, such as a gain from selling the property, is treated as non-interest or other income.
- Unrealised accrued income should not be recognised merely because an SNFA is acquired.
- Already recognised unrealised income needs to be reversed as applicable.
- Income earned from an SNFA is treated as other/non-interest income.
- Maintenance and upkeep expenses are charged to the Profit & Loss Account in the year incurred.
What is a Special Rupee Vostro Account (SRVA)?
A Special Rupee Vostro Account (SRVA) is a rupee-denominated account that facilitates cross-border transactions in Indian Rupees. It allows trade between India and other countries to be settled in INR instead of relying on a third-party currency such as the US dollar. The account is maintained by an Indian bank for a foreign bank under the applicable RBI framework. SRVA is therefore important for understanding India’s international trade settlement mechanism.
- It is denominated in Indian Rupees (INR).
- It facilitates cross-border trade settlement.
- Export and import transactions can be settled in INR.
- Invoicing of exports and imports in INR is possible.
- An Authorised Dealer (AD) Category-I bank can open an SRVA for a foreign bank under the applicable framework.
- Permitted current and capital account transactions can be carried out.
- Surplus balances can be invested in permitted debt instruments in India.
- Examples of permitted debt instruments
- Bonds
- Non-Convertible Debentures (NCDs)
- Commercial Papers
How does an SRVA work in international trade?
Suppose an Indian importer purchases goods from a foreign exporter. Instead of making the payment in US dollars, the transaction can be settled in Indian Rupees through the SRVA maintained by the foreign bank with an Indian bank. The foreign bank can then use the INR balance for permitted payments. This arrangement reduces the need to convert every trade transaction into a third-party currency.
Indian Importer – INR Payment – SRVA of Foreign Bank – Foreign Exporter
This makes the SRVA an important mechanism for facilitating INR-based cross-border trade settlement.
What is the Financial Inclusion Index for March 2026?
The Financial Inclusion Index (FI-Index) for March 2026 stands at 70, compared with 67 for March 2025. The increase shows improvement in financial inclusion in the country. The transcript highlights that the Usage parameter was the main driver behind the increase. The FI-Index measures the extent of financial inclusion across different aspects of access, usage and quality.
| Particular | Details |
| FI-Index for March 2026 | 70 |
| FI-Index for March 2025 | 67 |
| Main driver of increase | Usage |
| Range | 0 to 100 |
| First published | August 2021 |
| First data period | March 2021 |
| Publication | Annually |
| Data period | March |
| Usual release month | July |
| Base year | No fixed base year |
What are the 3 parameters of the Financial Inclusion Index?
The FI-Index is based on 3 broad parameters Access, Usage and Quality. Each parameter has a different weight in the index. Among these, Usage carries the highest weightage. The March 2026 improvement was mainly driven by the Usage parameter.
| Parameter | Weightage | What it measures |
| Access Access measures whether people can access financial services. The availability of bank branches and other financial services is part of this parameter. | 35% | Availability and accessibility of financial services |
| Usage Usage measures whether people actually use the financial services available to them. It has the highest weightage of 45% and was the main factor behind the rise in the March 2026 FI-Index. | 45% | Actual use of financial services |
| Quality Quality looks at the quality of financial services, financial literacy and the ability to resolve customer issues effectively. | 20% | Quality of services and financial literacy |
FAQs
The RBI Financial Inclusion Index for March 2026 is 70.
The FI-Index for March 2025 was 67.
The Usage parameter has the highest weightage of 45%.
The maximum disposal period for an SNFA is 7 years.
SNFA stands for Specified Non-Financial Asset.
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