RBI raises the repo rate by 25 basis points to 5.50% and shifts to a calibrated tightening stance on 7 October 2026.
The Monetary Policy Committee, at its 63rd meeting held from 5 to 7 October 2026 under Governor Sanjay Malhotra, voted unanimously to raise the policy repo rate to 5.50% and changed its stance from neutral to calibrated tightening. This is reported as the first rate increase since February 2023 and reverses part of the 125 basis points of cuts delivered in 2025. The Committee noted that inflation and its outlook are not as benign as last year, with food and fuel inflation becoming more broad-based.
Key Takeaways:
- The SDF rate moves to 5.25% and the MSF rate and Bank Rate to 5.75%. The Committee said rate cuts are off the table in the near term, with further action being either a hike or a pause depending on the growth-inflation outlook. Two members, Dr. Nagesh Kumar and Prof. Ram Singh, favoured retaining the neutral stance.
- CPI inflation rose to 4.8% in August 2026 from 4.5% in July. The RBI now projects CPI inflation of 5.2% for 2026-27 (Q2: 4.9%, Q3: 6.0%, Q4: 5.7%), with core inflation at 4.4%, and expects headline CPI to average almost 5.8% over the next three quarters.
- Real GDP growth for 2026-27 is projected at 7.1% (Q2: 7.2%, Q3: 6.9%, Q4: 6.8%). Risks flagged include geopolitical tensions, crude oil volatility, deficient monsoon conditions, El Niño-related disruption and tightening global financial conditions.
- Borrowers with repo-linked floating-rate facilities should expect upward repricing, and treasury teams should revisit rate and funding-cost assumptions. The next MPC meeting is scheduled for 2 to 4 December 2026.
SEBI notifies new Settlement Regulations and Portfolio Managers Regulations, 2026, in October 2026.
Following the Board decisions of 24 September 2026, SEBI notified two new sets of regulations in the first week of October. The SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, dated 6 October 2026, replace the 2018 settlement framework with effect from 7 November 2026. The SEBI (Portfolio Managers) Regulations, 2026, notified on 7 October 2026 and including the new PRIM route for investing client money in mutual fund units, replace the 2020 Regulations from 1 April 2027.
Key Takeaways:
- Settlement process: SEBI must generally issue a settlement notice before a show cause notice, giving the recipient 60 days to apply, and the period to apply after a show cause notice rises from 60 to 90 days. Application fees are Rs. 25,000 for natural persons and Rs. 35,000 for others. Settlement remains discretionary, and filing an application does not stop the proceeding.
- Settlement amounts: the base amount is the statutory minimum penalty multiplied by an applicant-specific factor, from 2 for independent directors to 4 for companies and intermediaries and 5.5 for market infrastructure institutions. Minimum amounts of Rs. 3 lakh for first-time applicants and Rs. 7 lakh for others are retained, interest on disgorgement runs at 9% per annum (12% after a final order), and a fast-track route applies to eligible cases up to Rs. 10 lakh where no disgorgement or remedial terms are involved.
- Transition: a one-time 90-day window from commencement is available for specified pending proceedings where no application was filed earlier, or an earlier application was rejected, returned or withdrawn. An additional 20% is payable on the settlement amount.
- PRIM: portfolio managers may invest only in direct plans of mutual funds, including ETFs, index funds and specialised investment funds, and may not charge distribution-related fees. The minimum ticket size is Rs. 25 lakh (Rs. 50 lakh for conventional PMS) and the fixed management fee is capped at 1% of client assets, with performance-linked fees permitted. An applicant offering PRIM exclusively needs net worth of Rs. 2 crore, with at least 10% in unencumbered liquid assets, against Rs. 5 crore for other portfolio managers.
GST amendments under the Finance Act, 2026 notified to take effect from 1 November 2026.
CBIC Notification No. 03/2026-Central Tax dated 26 October 2026 brings sections 153 to 155 of the Finance Act, 2026 into force from 1 November 2026. The provisions amend sections 15, 34 and 54 of the CGST Act, 2017, covering post-supply discounts, credit notes and refunds. The notification does not give the changes retrospective effect.
Key Takeaways:
- Post-supply discounts: section 15(3)(b) is substituted so that a discount given after supply can be excluded from the value of supply without a prior agreement or invoice-wise linkage, provided the credit note and input tax credit reversal conditions are met. Section 34(1) now expressly recognises a credit note for such a discount. Discounts dealt with before 1 November 2026 remain governed by the earlier section 15(3)(b).
- The section 34(2) time limit continues to apply: the credit note must be declared by 30 November following the end of the financial year of the supply, or the date of the annual return, whichever is earlier. Businesses should document discount terms and credit note practices carefully, as the credit note is now central to the benefit.
- Refunds: the 90% provisional refund under section 54(6) is extended to unutilised input tax credit arising from an inverted duty structure, giving statutory backing to what had been an administrative arrangement. Section 54(14) is also amended so that the Rs. 1,000 minimum refund limit no longer applies to goods exported with payment of tax.
- The notification brings the amendments into force under the CGST Act. Corresponding State GST amendments depend on each State’s own legislation and notification; Maharashtra, for example, has enacted its amending Act. Businesses should confirm the State position before applying the changes to intra-State supplies.
IBBI notifies CIRP (Fifth Amendment) Regulations, 2026 for corporate debtors with real estate projects on 30 October 2026.
The Insolvency and Bankruptcy Board of India notified the Insolvency Resolution Process for Corporate Persons (Fifth Amendment) Regulations, 2026 on 30 October 2026 (No. IBBI/2026-27/GN/REG155), to come into force on publication in the Official Gazette. The amendments introduce project-level records, fund discipline and cost assessments into the CIRP of real estate developers and strengthen the position of allottees.
Key Takeaways:
- Regulation 4D is substituted. Alongside the separate bank account for each real estate project, the resolution professional must place project-wise statements of receipts and payments before the committee of creditors at intervals the committee considers appropriate, and ensure that the fund utilisation requirements of the RERA are complied with during the CIRP.
- New regulation 4F applies where the corporate debtor has more than one real estate project. Project-wise details go to the first committee meeting, and the committee may, by at least 66% of voting share and with reasons recorded, recommend to the Adjudicating Authority that a project be excluded from the CIRP.
- New regulation 4G requires an independent project-wise technical and cost-to-complete assessment, appointed with the committee’s prior approval and obtained before the invitation for expressions of interest. It must be included in the information memorandum, and its cost forms part of the insolvency resolution process costs.
- Resolution plans must give project-wise detail, including treatment of allottees’ claims (possession, conveyance, refund), delivery timelines by project, phase or tower, and periodic progress reports to the monitoring committee. Monitoring committees must include a representative of the allottees and, subject to their agreement, representatives of the relevant RERA authority and competent authority.
