RBI MPC keeps repo rate unchanged at 5.25%, maintains 'neutral' stance
RBI MPC February meeting: In its policy meeting, which took place between February 4-6, the committee continued with the 'neutral' stance
 "RBI MPC keeps repo rate unchanged at 5.25%, maintains 'neutral' stance")
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Friday kept the repo rate unchanged at 5.25 per cent. RBI Governor Sanjay Malhotra announced the decision after the policy meeting.
In its policy meeting, which took place between February 4-6, the committee continued with the 'neutral' stance.
The latest move follows a series of rate reductions last year. Since February 2025, the MPC has lowered the repo rate by a total of 100 basis points (bps) through three consecutive cuts. This brought the policy rate down from 6.5 per cent in February to 5.5 per cent in June. One basis point equals one-hundredth of a percentage point.
The standing deposit facility (SDF) rate was kept at 5 per cent. The marginal standing facility (MSF) rate and the bank rate were both set at 5.50 per cent.
RBI MPC: Growth outlook improved
The central bank has raised its growth forecast for FY26 to 7.4 per cent, up from the earlier estimate of 7.3 per cent.
The quarterly growth projections are as follows:
Q1 FY27: 6.9 per cent
Q2 FY27: 7 per cent
Domestic inflation and growth outlook remain positive, and the Indian economy remains resilient, says Malhotra.
“Amidst global headwinds, private consumption and fixed investment supported growth. Net external demand, however, remained a drag, with imports outpacing exports. On the supply side, growth in real GVA, on the back of a strong contribution from the services sector and revival in manufacturing activity, is estimated at 7.3 per cent in 2025-26," the RBI Governor said.
RBI MPC: Inflation forecast
"Headline CPI inflation remained low in November and December even as it firmed up by one percentage point in these two months. This increase was largely driven by the lower rate of deflation in the food group. Excluding gold, core inflation remained stable at 2.6 per cent in December," the RBI Governor said.
The MPC revised its inflation forecast from 2 per cent to 2.1 per cent. The quarterly inflation forecasts are:
Q4 FY26: 3.2 per cent
Q1 FY27: 4 per cent
Q2 FY27: 4.2 per cent
“Improving corporate sector performance and sustained momentum should boost manufacturing activity. High capacity utilisation, supportive financial conditions, and government focus on infrastructure expected to spur investments,” said Malhotra.
The next meeting of the MPC is scheduled from April 6 to 8.
RBI moves to boost customer protection
The RBI announced several steps to improve customer protection, digital payment safety and reduce mis-selling of financial products.
Malhotra said the central bank will issue three draft guidelines covering mis-selling of financial products, recovery of loans and the role of recovery agents, and limits on customer liability in unauthorised electronic banking transactions.
The RBI has also proposed a framework to compensate customers for losses caused by small-value frauds. Under the plan, customers may receive compensation of up to ₹25,000 in eligible cases.
The RBI has reviewed key financial inclusion schemes such as the Lead Bank Scheme, Kisan Credit Card and Business Correspondent model. Revised draft guidelines will be issued, along with a unified portal to improve data reporting.