The Delhi Government entered into a significant Memorandum of Understanding (MoU) with the Reserve Bank of India (RBI), incorporating the national capital into the RBI’s comprehensive banking, cash management, and debt system for the first time.

The action concludes years of improvised financial agreements and aligns Delhi with other states concerning fiscal activities.

According to the agreement, the RBI will serve as the banker, debt manager, and financial representative for the Government of NCT of Delhi. This will enable the capital to secure funds via market borrowings, automatically invest excess cash, and obtain low-cost liquidity options, all within the guidelines established by the Government of India and the RBI Act.

The MoU was signed at the Delhi Secretariat during a meeting led by Chief Minister Rekha Gupta, who is also in charge of finance. Key representatives from the RBI and the Delhi government attended, including Additional Chief Secretary (Finance) Bipul Pathak and Chief Secretary Rajiv Verma.

Chief Minister Rekha Gupta stated that the decision signifies a significant turn towards financial discipline and governance by institutions.

"Even though it is the capital of the nation, Delhi was excluded from the RBI’s organized banking framework for years. This agreement introduces clarity, order, and expert financial oversight,” she stated.

Officials stated that the MoU allows Delhi to secure funds via State Development Loans at competitive interest rates of approximately 7 percent. Previously, the capital relied on different borrowing methods that frequently involved interest rates reaching 12 to 13 percent, increasing strain on public finances.

A significant aspect of the agreement is the automatic investment of excess funds. Any surplus cash balance with the Delhi government will now be invested daily via RBI mechanisms, securing interest revenue and avoiding idle public funds. Previously, significant amounts were left unused, resulting in financial losses.

The RBI will offer short-term liquidity assistance via Ways and Means Advances and Special Drawing Facilities. These resources will assist in handling short-term cash flow inconsistencies without resorting to emergency loans or financial pressure. With the signing of the MoU, Delhi now aligns with other states and Union Territories that have legislatures functioning entirely under the RBI’s banking and debt management system.

Officials stated that this will enhance creditworthiness, boost investor trust, and align Delhi’s finances with national benchmarks. The reform comes after continuous interaction between the Delhi government and the Centre.

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Officials reported that the MoU followed talks between Chief Minister Rekha Gupta and Union Finance Minister Nirmala Sitharaman in December 2025, during which topics concerning fiscal autonomy and the modernization of Delhi's financial framework were addressed.

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A notification from the Government of India, dated January 2, 2026, and effective from January 9, officially distinguishes Delhi’s Public Accounts from those of the Government of India. This provides the capital with a self-sufficient banking and borrowing framework for the first time.

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The Chief Minister stated that money obtained from market borrowings would be exclusively allocated for capital expenditures.

“Loan funds will not cover everyday expenses.” “It will focus on asset creation that provides enduring advantages,” she stated.