New Delhi, Jan 5 (IANS) Chief Minister Rekha Gupta on Monday signed an MoU with the Reserve Bank of India, enabling the Central Bank to function as the banker, debt manager and financial agent of the government of the NCT of Delhi, facilitating easy market borrowings through State Development Loans for infra projects.
The MoU enables the Reserve Bank of India to function as the banker, debt manager, and financial agent of the government of the NCT of Delhi, facilitating market borrowings through State Development Loans.
The Chief Minister expressed gratitude to Prime Minister Narendra Modi for his visionary leadership and continued guidance, and for enabling Delhi to secure an independent and transparent banking framework aligned with national fiscal norms.
Under the MoU, the RBI will also help the Delhi government in automatic investment of surplus cash, professional cash management, and access to low-cost liquidity facilities, strictly within the framework prescribed by the Government of India and the RBI Act.
The MoU was signed at a meeting held at the Delhi Secretariat, chaired by the Chief Minister, between the Reserve Bank of India and Bipul Pathak, Additional Chief Secretary (Finance) of the Delhi government. Senior officials from the Delhi Government and the Reserve Bank of India, including Delhi Chief Secretary Rajeev Verma, were also present on the occasion.
Chief Minister Gupta, who also holds the Finance portfolio in the Delhi Government, described the MoU as a transformational milestone and a long-overdue reform that previous governments failed to initiate.
“This agreement marks a historic correction in Delhi’s financial governance. Despite being the nation’s capital, Delhi was denied the benefits of structured RBI banking and market borrowings for years. Earlier governments never showed the intent or vision to adopt globally accepted norms of fiscal prudence. Today, that decisively changes,” the Chief Minister stated.
The Chief Minister underlined that successive AAP governments neither invested surplus public funds nor adopted cost-efficient borrowing mechanisms. Excess cash remained idle, resulting in loss of interest income, while borrowings were undertaken at high interest rates from other sources, placing an unnecessary burden on public finances and, ultimately, on citizens.
“In contrast, this government has placed fiscal discipline, transparency, and long-term sustainability at the core of governance. Every rupee of public money must now work for the people of Delhi,” she said.
Key features of the MoU include automatic investment of surplus funds under which any excess cash balance with the Delhi Government will now be automatically invested daily through RBI mechanisms, generating interest income and eliminating losses caused by idle funds.
Also, Delhi will have access to Ways and Means Advances and Special Drawing Facilities from the RBI, ensuring efficient management of temporary cash flow mismatches without resorting to expensive or emergency borrowing.
The MoU will also help market borrowings. For the first time, Delhi will raise funds from the open market at competitive interest rates of approximately 7 per cent through State Development Loans, replacing earlier high-cost borrowing at interest rates of 12 to 13 per cent from alternative sources.
With this MoU, Delhi now stands at par with other States and Union Territories with legislatures, benefiting from RBI’s professional banking, cash management, and debt management systems.
The Chief Minister stated that this major reform is the outcome of sustained engagement with the Union Government and follows her recent meeting with Union Finance Minister Nirmala Sitharaman in December 2025, where key issues concerning fiscal autonomy and modernisation of Delhi’s financial architecture were discussed.
Pursuant to a Government of India notification dated 2 January 2026, effective from 9 January 2026, the Public Accounts of the Government of NCT of Delhi have been separated from the Public Accounts of the Government of India, providing Delhi with an independent banking and borrowing structure for the first time.
--IANS
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