RBI Keeps Repo Rate Unchanged At 5.25 Per Cent

The Reserve Bank of India has decided to maintain the policy repo rate at 5.25 per cent, signalling continuity in its monetary stance amid evolving inflation and growth dynamics. Announcing the sixth and final bi-monthly monetary policy for the current financial year, RBI Governor Sanjay Malhotra said the decision was taken unanimously by the Monetary Policy Committee.

Monetary Policy Committee decision

The Reserve Bank of India stated that the Monetary Policy Committee voted unanimously to keep the policy repo rate unchanged at 5.25 per cent. As a result, other key policy rates, including the reverse repo and marginal standing facility rates, will also remain unchanged. The decision follows a 25 basis points rate cut announced in December 2025.

Revised inflation outlook for 2026–27

RBI revised its consumer price index inflation projections for the first quarter of 2026–27 to 4.0 per cent and the second quarter to 4.2 per cent. Earlier, the central bank had projected inflation at 3.9 per cent and 4.0 per cent for the respective quarters. Governor Sanjay Malhotra said the upward revision was largely due to higher prices of precious metals, which contributed around 60–70 basis points to the inflation outlook.

Improved GDP growth projections

The central bank also raised its real GDP growth estimates for the upcoming fiscal. Growth for the first quarter of 2026–27 has been revised to 6.9 per cent, while the second quarter is projected at 7.0 per cent. In the previous MPC assessment, RBI had estimated growth at 6.7 per cent and 6.8 per cent, respectively, indicating improved macroeconomic momentum.

Important Facts for Exams

• The repo rate is the rate at which RBI lends to commercial banks.
• MPC decisions on policy rates are taken by majority vote.
• CPI inflation is the primary nominal anchor for monetary policy.
• RBI issues bi-monthly monetary policy statements.

Digital banking, customer protection and regulatory reforms

RBI announced that it will issue draft guidelines to limit customer liability in unauthorised electronic banking transactions, proposing compensation of up to ₹25,000 for losses in small-value frauds. The central bank will also release a discussion paper on enhancing digital payment safety, including measures such as lagged credits and additional authentication for vulnerable groups like senior citizens. Further, RBI plans draft guidelines on mis-selling, loan recovery practices and the engagement of recovery agents, along with revised frameworks for the Lead Bank Scheme, Kisan Credit Card Scheme and the Business Correspondent Model.