Keeping up with RBI circulars is a smart strategy for scoring well in banking and regulatory exams. The February 2026 RBI updates are especially important because they directly impact credit policy, MSME lending, FPI investment rules, digital payments, risk management, and banking supervision frameworks. These circulars are frequently used to frame MCQs in exams like RBI Grade B, NABARD Grade A, SEBI Grade A, and banking promotion tests.
In this blog, we have provided details about the RBI February circulars along with a practice questions PDF and a live quiz.
Download RBI Circulars February 2026 Practice Quiz PDF
The RBI Circulars February 2026 Practice Quiz is a revision-based MCQ set prepared from the latest RBI notifications, master directions, and operational guidelines released during February 2026. It helps banking aspirants revise important developments in the financial sector in a practical and exam-oriented manner.
The quiz covers key concepts such as FPI framework updates, MSME lending changes, IRAC norms, BSR data trends, digital payment developments, and risk management updates. It is designed to strengthen conceptual clarity, improve retention, and support quick revision for both Phase 1 and Phase 2 examinations.
| Particulars | Link |
| RBI February Circular Quiz PDF | Download Free PDF |
| Check 2026 RBI Circular Details | Check Details |
Attempt the RBI Circulars February 2026 Quiz
RBI circulars have become highly important in banking and regulatory examinations as they reflect real-time policy and regulatory changes. Questions are frequently framed around compliance rules, lending norms, reporting systems, and financial stability measures.
1. What was the earlier investment cap under the Voluntary Retention Route (VRR) for Foreign Portfolio Investors before RBI’s recent amendment?
2. After RBI’s recent update, what has happened to the VRR investment cap?
3. What is the minimum lock-in period required under the Voluntary Retention Route (VRR)?
4. What is the FPI investment limit for Central Government Securities as a percentage of outstanding stock?
5. Under the revised MSME classification, what is the maximum turnover limit for a ‘Micro’ enterprise?
6. What is the investment in plant and machinery limit for a ‘Medium’ enterprise under revised MSME classification?
7. Up to what loan amount is collateral-free lending mandated for MSMEs?
8. Up to what amount can banks extend the collateral-free MSME loan limit at their discretion?
9. Under the IRAC norms, if a payment is overdue for more than how many days is an asset classified as NPA?
10. What accounting basis is used for income recognition on NPA accounts?
11. Under IRAC norms, what must happen to income already booked on an account that is later classified as NPA?
12. Which of the following best describes a Default Loss Guarantee (DLG)?
13. DLG is said to resemble which financial instrument?
14. Under RBI’s DLG framework, which Indian Accounting Standard governs the treatment of DLG?
15. Which type of banks are excluded from submitting Basic Statistical Return (BSR) data to RBI?
16. As per BSR data, which sector recorded the highest credit growth?
17. What was the overall credit growth rate as per the latest BSR data?
18. What is the base year for the RBI Digital Payment Index (DPI)?
19. When was the RBI Digital Payment Index (DPI) first launched?
20. What was the DPI value for September 2025?
Quiz Summary
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What are the key updates in FPI and VRR framework?
Foreign Portfolio Investment (FPI) refers to investments made by foreign investors in Indian financial markets without gaining control over management. The February 2026 circular updated the Voluntary Retention Route (VRR) to encourage stable long-term inflows into India. The earlier investment cap under VRR has been removed, and it is now merged with overall FPI debt limits while retaining the lock-in structure. This change simplifies the framework and supports smoother foreign investment flow.
| Aspect | Details |
| FPI Meaning | Foreign investment without management control |
| Investment Types | Equity, debt, mutual funds |
| VRR Purpose | Stable long-term investment |
| Earlier VRR Cap | ₹2.5 lakh crore |
| New Update | Cap removed |
| Lock-in Period | Minimum 3 years |
| General Route | Macroprudential limits apply |
| FAR Route | No limits on eligible govt securities |
| Debt Limits | G-Sec: 6%, SDL: 2%, Corporate Bonds: 15% |
What are MSME collateral-free lending rule changes?
The MSME framework was revised to improve credit access for small and medium businesses. MSMEs are classified based on investment in plant & machinery and turnover limits. RBI has strengthened collateral-free lending rules to reduce dependency on security and promote entrepreneurship. Banks now have some flexibility to extend higher limits based on borrower strength and internal policies.
| MSME Category | Investment & Turnover Limits | Lending & Policy Rules |
| Micro | Investment: ≤ ₹2.5 croreTurnover: ≤ ₹10 crore | Collateral-free loan up to ₹20 lakhBank discretion up to ₹25 lakhGold/Silver collateral allowed voluntarilyPMEGP scheme applicable |
| Small | Investment: ≤ ₹25 croreTurnover: ≤ ₹100 crore | Collateral-free loan up to ₹20 lakhBank discretion up to ₹25 lakhGold/Silver collateral allowed voluntarilyPMEGP scheme applicable |
| Medium | Investment: ≤ ₹125 croreTurnover: ≤ ₹500 crore | Collateral-free loan up to ₹20 lakhBank discretion up to ₹25 lakhGold/Silver collateral allowed voluntarilyPMEGP scheme applicable |
What is IRAC framework in cooperative banking norms?
The IRAC framework stands for Income Recognition, Asset Classification, and Provisioning norms. It is a prudential system designed to ensure financial discipline and accurate reporting in banks. Income recognition depends on whether the asset is standard or non-performing. Cooperative banks follow these norms to maintain transparency and reflect the true financial position.
| Component | Explanation |
| Income Recognition | Based on accrual or cash method |
| Standard Assets | Income recorded on accrual basis |
| NPAs | Income recorded on cash basis |
| Purpose | Financial prudence |
| Applicability | Rural cooperative banks |
How are NPAs classified under RBI norms?
Non-Performing Assets (NPAs) are loans where repayment is overdue beyond 90 days. RBI uses strict classification rules to ensure correct asset quality reporting. Once an account becomes NPA, income already recorded must be reversed. This ensures banks do not overstate profits and maintain financial accuracy.
| Asset Type | Meaning |
| Standard Asset | Regular repayment of principal and interest |
| NPA Definition | Overdue > 90 days |
| Income Treatment (Standard) | Accrual basis |
| Income Treatment (NPA) | Cash basis |
| Income Reversal | Mandatory for already booked income |
What is Default Loss Guarantee (DLG) in lending framework?
Default Loss Guarantee (DLG) is a risk-sharing arrangement between fintech companies and NBFCs. In this model, fintech firms source borrowers while NBFCs provide loans. The fintech guarantees part of the credit losses, reducing risk for NBFCs. This structure is similar to synthetic securitization because only risk is transferred, not the actual loan asset.
| Aspect | Details |
| Structure | Fintech sources borrowers; NBFC lends |
| Risk Sharing | Fintech covers part of losses |
| Nature | Similar to synthetic securitization |
| Accounting Standard | Ind AS 109 (ECL model) |
| RBI Condition | Must be part of loan contract |
| Compliance | Not treated as separate asset |
What does BSR data reveal about credit and deposits?
Basic Statistical Return (BSR) is an RBI reporting system that tracks credit and deposit performance in the banking sector. It is released quarterly and provides important insights into sectoral growth trends. The latest data shows strong credit expansion led by agriculture and steady growth in deposits across the banking system.
| Indicator | Data/Trend |
| Credit Growth | 12.2% |
| Agriculture | 13.7% (highest) |
| Industry | 12.9% |
| Personal Loans | 12.1% |
| Deposit Growth | 10.5% |
| Term Deposits | 62.6% |
| Savings Deposits | 28.8% |
| PSU Banks | Higher credit growth |
| Private Banks | Higher deposit growth |
What is Digital Payment Index (DPI) and its latest trend?
The Digital Payment Index (DPI) measures the adoption of digital payment systems in India. It is released by Reserve Bank of India twice a year and reflects the progress of digital financial infrastructure. The index has shown consistent growth due to the rise of UPI, mobile banking, and improved payment infrastructure across the country.
| Aspect | Details |
| Purpose | Measures digital payment adoption |
| Base Year | March 2018 = 100 |
| Latest Value | 516.76 (Sep 2025) |
| Previous Value | 493.22 (Mar 2025) |
| Frequency | Semi-annual release by RBI |
| Key Drivers | UPI, mobile banking, improved payment infrastructure |
| Payment Performance | 45% |
| Payment Enablers | 25% |
| Infrastructure | 25% |
| Consumer Centricity | 5% |
Know more about RBI Circulars 2026
What is Deposit Insurance and risk-based premium system?
Deposit insurance ensures protection for bank depositors in case of bank failure. It is managed by DICGC in India. Earlier, all banks paid a flat premium, but the new system introduces risk-based pricing. Safer banks pay lower premiums, while riskier banks pay higher premiums, improving fairness and financial discipline.
| Aspect | Details |
| Insurance Body | DICGC |
| Coverage Limit | ₹5 lakh per depositor |
| Covered Accounts | Savings, FD, current, RD |
| Old System | Flat premium (12 paise per ₹100) |
| New System | Risk-based premium |
| Risk Categories | A to D |
| Vintage Benefit | Up to 25% discount |
| Payment Banks | Flat rate continues |
What are other important RBI February 2026 updates?
Apart from core banking reforms, February 2026 circulars also included macroeconomic and regulatory developments. These updates focus on financial literacy, cybersecurity, monetary policy stability, and banking risk controls. They are important for understanding the broader financial environment and exam-relevant policy direction.
- Financial Literacy Week 2026 focused on KYC, RE-KYC, CKYC
- Cyber fraud prevention workshop conducted in Mumbai
- Repo rate maintained at 5.25% with neutral stance
- GDP growth projection: 7.4%, CPI inflation: 2.1%
- Capital adequacy rules updated for clearing corporation guarantees
- Strong emphasis on digital banking security
- Focus on capital market exposure and risk controls
FAQs
The quiz helps candidates revise important RBI circulars and regulatory updates released in February 2026.
RBI removed the earlier ₹2.5 lakh crore cap under the Voluntary Retention Route (VRR).
Banks can provide collateral-free loans up to ₹20 lakh to eligible MSMEs.
A loan becomes an NPA if interest or principal remains overdue for more than 90 days.
The latest DPI value is 516.76 for September 2025.
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