RBI Signs Pact to Handle Delhi Govt’s Banking, Debt Management Operations from January 2026

The Reserve Bank of India (RBI) will take over the general banking operations and rupee public debt management of the Government of the National Capital Territory of Delhi (GNCTD) starting January 9, 2026.  

The arrangement has been formalised through an agreement signed under sub-section (1) of Section 21A of the Reserve Bank of India Act, 1934, the central bank said in a notification. 

Scope of RBI’s Responsibilities 

Under the agreement, the RBI will handle the Delhi government’s routine banking activities, including operation of government accounts and management of cash balances. It will also be responsible for managing the capital’s rupee-denominated public debt.  

Similar arrangements are already in place between the RBI and several other state governments, as well as the Union government. 

MoU Signed at Delhi Secretariat 

The agreement was concluded through a Memorandum of Understanding signed at the Delhi Secretariat. The meeting was chaired by Chief Minister Rekha Gupta, who also holds the finance portfolio.  

Senior officials from the Delhi government and the RBI attended the meeting, including Additional Chief Secretary (Finance) Bipul Pathak and Chief Secretary Rajiv Verma. 

Impact on Borrowing Costs 

With the RBI managing borrowings, Delhi will raise funds through State Development Loans. These borrowings are expected to be issued at interest rates of around 7%, compared with earlier borrowing costs estimated at 12-13%. The change alters how the capital accesses the debt market and services its liabilities. 

Cash Management Features 

The new framework allows for automatic daily investment of surplus cash balances held by the Delhi government. It also provides access to Ways and Means Advances and Special Drawing Facilities to address temporary mismatches between receipts and payments, helping manage short-term liquidity needs. 

Separation of Public Accounts 

A central government notification issued on January 2 formally separated Delhi’s public accounts from those of the Government of India. This step gives the national capital an independent banking and borrowing structure for the first time, placing its public finances on a separate administrative footing. 

Read More: SC Scraps Customs Duty on Adani Power Electricity Supplies to Domestic Market! 

Conclusion 

From January 9, 2026, the RBI will oversee Delhi’s banking operations and rupee public debt management, changing the way the capital manages its accounts, borrowings, and cash balances under the existing legal framework. 

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