What Happened
- The Reserve Bank of India's Utkarsh 2.0 medium-term strategy framework (covering 2023–2025) placed strong emphasis on improving customer service and financial inclusion, alongside strengthening market infrastructure and pricing transparency — particularly in the government securities market.
- Technology adoption, including artificial intelligence (AI) and digitalisation, formed a key pillar of the strategy.
- Utkarsh 2.0 has now transitioned into Utkarsh 3.0 (also called the Medium-Term Strategy Framework Utkarsh 2029), approved by the RBI Central Board in 2026, covering April 2026 to March 2029.
- Utkarsh 3.0 continues and deepens the focus areas: financial stability, inflation control, supervision of banks and NBFCs, digital payments ecosystem expansion, promotion of the Central Bank Digital Currency (CBDC / digital rupee), and fintech sector support.
- Separately, the RBI's FREE-AI Committee (Framework for Responsible and Ethical Enablement of Artificial Intelligence) released its report in August 2025 — the first-of-its-kind framework guiding how banks, NBFCs, and payment companies should deploy AI responsibly.
- The government securities market transparency push includes digital rupee pilots for secondary market settlement and initiatives to improve yield curve formation and price discovery.
Static Topic Bridges
RBI's Medium-Term Strategy Frameworks — Utkarsh Series
The RBI has periodically released medium-term strategy frameworks to give institutional direction and accountability to its operations. Utkarsh 2022 was the first (covering 2019–2022). Utkarsh 2.0 followed (covering 2023–2025), released in December 2022. Utkarsh 3.0 (Utkarsh 2029) was approved in 2026 for April 2026 to March 2029. These frameworks are not mere wish lists — they define measurable goals for regulation, supervision, currency management, payment systems, customer protection, and financial inclusion.
- Utkarsh 2022: first medium-term strategy (2019–2022); focused on strengthening monetary policy and regulation
- Utkarsh 2.0 (2023–2025): customer service, financial inclusion, government securities market transparency, technology adoption
- Utkarsh 3.0 / Utkarsh 2029 (2026–2029): financial stability, CBDC expansion, fintech regulation, AI governance, inflation control
- All three frameworks approved by RBI's Central Board
- The RBI Central Board meeting (which approved Utkarsh 3.0) was held in Patna — after a gap of eight years since the board last met outside Mumbai
Connection to this news: Utkarsh 2.0's focus on customer service and financial inclusion created the institutional foundation for Utkarsh 3.0 — which is now operationalising these commitments through digital infrastructure, AI frameworks, and regulatory tech.
Financial Inclusion in India — Progress and Gaps
Financial inclusion refers to ensuring that all individuals and businesses have access to affordable, useful financial products and services. India has made significant strides: Jan Dhan Yojana accounts crossed 53 crore; Aadhaar-linked DBT (Direct Benefit Transfer) has transferred over ₹37 lakh crore since 2013. Yet, gaps persist — particularly in credit access for smallholder farmers, informal micro-enterprises, and women entrepreneurs in rural areas.
- Pradhan Mantri Jan Dhan Yojana (PMJDY): ~53 crore accounts; ₹2.3 lakh crore deposits
- DBT (Direct Benefit Transfer): ₹37 lakh crore+ transferred since 2013, eliminating middlemen
- Credit gap: ~70% of India's small businesses lack formal credit access
- RBI's priority sector lending (PSL) mandates: banks must lend 40% of Adjusted Net Bank Credit to priority sectors including agriculture, MSMEs, housing
- AI in financial inclusion: alternative credit scoring using utility bills, GST filings, mobile data — enables "thin-file" borrowers to access credit
Connection to this news: Utkarsh 2.0's financial inclusion push is being amplified by AI tools in Utkarsh 3.0 — multilingual chatbots, automated KYC, and alternative credit scoring are the practical mechanisms through which the abstract goal of financial inclusion becomes reality.
Government Securities Market — Transparency and Infrastructure
The government securities (G-Sec) market is where the government borrows by issuing bonds. A well-functioning G-Sec market enables efficient price discovery (yield curve), helps set benchmark interest rates for the entire economy, and facilitates monetary policy transmission. The RBI has been working to improve pricing transparency in this market — including pilots for digital rupee settlement of G-Sec trades and the introduction of anonymous electronic trading platforms.
- G-Sec market: primary market (RBI-managed auctions), secondary market (Negotiated Dealing System-Order Matching, NDS-OM platform)
- Yield curve: derived from G-Sec prices; benchmarks corporate bond and bank lending rates
- Digital rupee (CBDC) G-Sec pilot: settlement of secondary market transactions in government securities using the wholesale CBDC
- Retail CBDC: digital rupee for everyday transactions; RBI pilot ongoing since 2022
- NDS-OM: electronic, anonymous platform for G-Sec trading — replaced dealer-to-dealer bilateral bargaining
Connection to this news: Utkarsh 2.0's emphasis on government securities market infrastructure transparency is materialising through the digital rupee wholesale pilot, which could eventually reduce settlement risk and increase the efficiency of sovereign debt management.
Key Facts & Data
- Utkarsh 2.0 period: 2023–2025; focus: customer service, financial inclusion, G-Sec market, technology
- Utkarsh 3.0 (Utkarsh 2029): April 2026–March 2029; approved by RBI Central Board in Patna (first meeting outside Mumbai in 8 years)
- Utkarsh 3.0 key pillars: financial stability, CBDC, fintech regulation, AI governance, inflation control, bank/NBFC supervision
- RBI FREE-AI framework: released August 2025; first AI governance framework for India's financial sector
- AI use cases in finance: customer support (15.6%), credit underwriting (13.7%), sales/marketing (11.8%), cybersecurity (10.6%)
- Jan Dhan accounts: ~53 crore; deposits: ₹2.3 lakh crore
- Digital rupee (CBDC) pilots: wholesale (G-Sec settlement) and retail ongoing
- Priority sector lending mandate: 40% of Adjusted Net Bank Credit