New Delhi [India], September 25 : The Reserve Bank of India (RBI) in its September 2025 Bulletin noted that the Indian economy has demonstrated resilience amid elevated global uncertainty, recording a five-quarter high growth in the first quarter of FY25-26, supported by strong domestic drivers.
The Bulletin, released on Wednesday, says that while global concerns persisted due to US trade tariffs and fiscal pressures in advanced economies, India continued to gain from domestic reforms.
"The landmark GST reforms should progressively result in a sustained positive impact through significant gains in ease of doing business, lower retail prices and strengthening of consumption growth drivers." noted central bank bulletin.
Consumer inflation edged up but stayed below the target rate for seven straight months.
"CPI headline inflation edged up but remained well below the target rate for the seventh consecutive month" said the bulletin.
The RBI bulletin also highlighted that surplus liquidity facilitated better transmission of policy rate cuts, while equity markets saw two-way movements in August-September. India's current account deficit moderated on the back of robust services exports and remittances.
On financial flows, the Bulletin observed that while non-food bank credit growth moderated in 2024-25 due to tighter norms on unsecured lending, the increase was offset by stronger funding from non-bank sources such as equity issuances, NBFC credit, and short-term external borrowing. As a result, the total flow of financial resources to the commercial sector rose, and outstanding credit to GDP ratios improved.
The Bulletin carried insights from a large-scale analysis of 5.69 million fintech app reviews through machine learning technique. It found that overall user experience remains positive, with trust and joy dominating sentiments. However, concerns persist over customer support, app functionality, and loan-related processes. Data privacy policies, market share, and frequent app updates were also found to influence user satisfaction.
On the NBFC sector, underlining its rising role in credit intermediation, especially in retail and industrial segments, it says by end-December 2024, NBFCs displayed strong financial health, reflected in robust return on assets, capital adequacy, and asset quality indicators.
"Borrowings, which are the main source of funds and constitute about two-third of the total liabilities of NBFCs, grew at a higher rate at end-December 2024 than a year ago." noted the bulletin.
On UPI adoption it highlighted a structural transformation in India's payment ecosystem. Empirical results confirmed that higher UPI penetration correlates with lower cash demand at national and state levels, though regional variations remain.
"this study finds that higher UPI adoption is associated with lower cash demand at both national and subnational levels, with state-level patterns suggesting non-linearity," noted RBIs bulletin.
Factors like income levels and ATM density were associated with greater cash dependence, while education and formalisation of workforce encouraged digital payments.
The Bulletin also highlighted that household consumption inequality has declined, with convergence in per capita consumption across states. Poorer states recorded faster growth in expenditure compared to richer ones, while poverty incidence fell significantly when adjusted to 2022-23 price levels.
On infrastructure, the RBI bulletin noted that sustained investment across physical, social, and digital infrastructure has significantly boosted India's GDP growth over the last decade.
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