RBI's Reporting Schedule Shift May Artificially Boost Credit Growth Figures
A significant technical adjustment in how banks report their fortnightly balance-sheet data to the Reserve Bank of India (RBI) is poised to artificially inflate India's credit numbers by more than Rs 2 lakh crore this year. This change could lift measured loan growth by over a percentage point, according to financial analysts.
From Rotating Fridays to Fixed Calendar Dates
The core of this change lies in the reporting schedule. Until recently, banks were required to submit their "statement of position" every alternate Friday, known as the reporting Friday. However, effective from December 15, 2025, the RBI has replaced this rotating schedule with fixed calendar cut-offs. Banks must now report data as on the 15th and the last day of each month.
If the fortnight ends on a holiday, banks report the previous working day's figures, though these still count for that specific fortnight. This shift is designed to align regulatory reporting more closely with conventional accounting periods, streamlining the process for financial institutions.
Impact on Fiscal Year-End Reporting
Under the old system, the last reporting Friday for the financial year 2024-25 fell on March 28. With the new rule, banks will report figures for March 31 in the current financial year. This effectively captures a few extra days of business activity at the close of the fiscal year, which is a critical period for lending.
Banks typically accelerate lending toward the end of March to meet annual targets and sometimes adjust balances for year-end reporting. This behavioral pattern, combined with the new reporting dates, creates a scenario where credit growth figures may appear higher than the underlying economic activity justifies.
Legal and Regulatory Background
The change follows amendments to banking laws, specifically the Banking Regulation (Amendment) Rules 2025. In these rules, Rule 15B was omitted, and sub-clauses in reporting forms were updated to shift the frequency from "alternate Fridays" (roughly bi-weekly) to the fixed dates of the 15th and last day of each month.
This adjustment also determines the base used to calculate the cash reserve ratio (CRR), which is the share of deposits that lenders must keep with the central bank. The shift aims to provide more consistent and predictable data for monetary policy decisions.
Analyst Insights on Growth Projections
Karthik Srinivasan of credit rating agency Icra highlighted the potential impact: "That additional lending period could artificially add about 1.5-2 percentage points to reported credit growth. After adjusting for the reporting-date change, reported growth could look closer to 13.5-14%."
This suggests that while the headline numbers might show robust expansion, a portion of this growth is attributable to the timing of reporting rather than a fundamental increase in lending activity. Analysts caution that stakeholders should consider this factor when interpreting credit growth data for the year.
The RBI's move is part of broader efforts to modernize financial reporting and enhance transparency. However, it underscores the importance of understanding methodological changes in economic data to avoid misinterpretations of India's banking sector health and credit market dynamics.
