RBI1 min read
Inflation Targeting
A monetary policy framework adopted by India in 2016 under an MOU between RBI and the Government of India, mandating the MPC to maintain retail inflation (CPI) at 4% with a tolerance band of ±2% (i.e., 2% to 6%).
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Inflation Targeting in Indian corporate law?▼
A monetary policy framework adopted by India in 2016 under an MOU between RBI and the Government of India, mandating the MPC to maintain retail inflation (CPI) at 4% with a tolerance band of ±2% (i.e., 2% to 6%).
Q2. Why is Inflation Targeting important for compliance?▼
Inflation Targeting is governed by the Reserve Bank of India under applicable banking and monetary policy frameworks. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Inflation Targeting?▼
Inflation Targeting is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with RBI regulatory matters in India.
Contextual Analysis & Regulatory Updates🔗
Read our latest analysis and critical updates on corporate circulars related to RBI:
RBI Issues Draft Interest Rates on Loans and Advances Directions, 2026 for Public Comments
Published: 13 August 2026
RBI Priority Sector Lending Second Amendment Directions, 2026 — FCNR(B)/NRE Deposit Advances Excluded from ANBC
Published: 7 August 2026
RBI Draft Eleventh Amendment Directions, 2026 — Bank Leverage Ratio Framework Aligned to Basel 2017 Standard
Published: 7 August 2026