RBI MPC 2025 Highlights: Endeavour of RBI to provide as much as liquidity as required, says RBI Guv

RBI Monetary Policy Highlights: RBI Governor Sanjay Malhotra announced a 25 bps cut in the repo rate -- from 6.5% to 6.25%

4:13 PM

'Rate cut is expected to benefit Bank Nifty index'

According to Kirang Gandhi, Pune-based Financial Mentor, "The Reserve Bank of India (RBI) has cut the repo rate by 25 basis points to 6.25 per cent, the first reduction in nearly five years, aiming to boost economic growth. FY26 GDP is projected at 6.7 per cent, with inflation at 4.2 per cent. The rate cut is expected to benefit the Bank Nifty index by lowering funding costs, improving net interest margins, and boosting credit demand. This could enhance banking sector profitability and drive positive investor sentiment, Markets remained volatile post-announcement, with banking stocks seeing initial gains while broader indices fluctuated. The RBI’s MPC maintained a "neutral" stance, and short-term volatility is expected as markets adjust."

4:11 PM

'Rate cut will provide a much-needed boost to housing demand'

According to Sudeep Bhatt. Director Strategy, Whiteland Corporation, “The RBI’s decision to reduce the policy repo rate by 25 basis points to 6.25 per cent is a highly positive step for the real estate sector. After 11 consecutive rate holds, this cut will provide a much-needed boost to housing demand by making home loans more affordable. Lower interest rates translate into reduced EMIs, enhancing homebuyers' purchasing power and encouraging more people to invest in property. Home loans will more affordable across all segments of housing and income groups. Additionally, it will ease liquidity concerns, enabling developers to access financing at better terms, further accelerating project completion and new launches"

4:09 PM

'Rate cut aligns with the government’s recent fiscal measures'

According to Manish Bhandari, CEO and Portfolio Manager at Vallum Capital Advisors, "The Reserve Bank of India’s (RBI) decision to cut the repo rate by 25 basis points to 6.25 per cent was widely anticipated, given the economic cues from the Union Budget 2025-26 and the Economic Survey. This marks the first rate cut in nearly five years and comes amid moderating inflation, a slightly tempered GDP outlook, and a need to sustain economic momentum. The move aligns with the government’s recent fiscal measures aimed at boosting growth, reinforcing a pro-consumption and pro-investment environment. The budget this year set the tone and premise for the rate cut while demonstrating the fiscal consolidation."

 

Bhandari added, "The Union Budget had already set the stage for monetary easing, introducing personal income tax reductions and incentives to boost disposable income and stimulate demand. Additionally, the Economic Survey 2025 projected a GDP growth rate of 6.4 per cent for FY25, slightly below earlier forecasts, reinforcing the need for policy support. Inflation, expected at 4.8 per cent for FY25, is projected to moderate further, allowing room for this rate cut without jeopardizing price stability. The combination of lower interest rates and tax relief from the Budget is likely to stimulate consumer spending, particularly in interest-rate-sensitive sectors such as automobiles, real estate, and discretionary consumer goods. Improved credit availability and reduced EMIs for borrowers could further bolster demand in the retail and SME segments, aiding broader economic recovery."

 

4:05 PM

'Proposed measures expected to enhance money supply within the economy'

According to Palka Arora Chopra. Director, Master Capital Services Ltd., "As anticipated, under the leadership of Sanjay Malhotra, the new governor, the Monetary Policy Committee voted to lower the repo rate by 25 basis points, to 6.25 per cent. India's central bank lowered interest rates in response to mounting worries about the slowing pace of economic expansion and new indications that inflation was getting close to its 4 per cent target."

 

Chopra added, "'NEUTRAL' is the unanimously maintained RBI policy position. The action aligned with market anticipations, as following the Budget 2025, there was a strong belief that the RBI would implement strategies to tackle the issue of slowing economic growth. For the fiscal year 2026, the Reserve Bank of India (RBI) has anticipated a GDP growth rate of 6.7 per cent, representing a modest increase from the 6.4 per cent forecast for the fiscal year 2025. Furthermore, the central bank has adopted a more positive outlook on inflation, projecting it to be 4.2 per cent for FY26, which is 60 basis points lower than the 4.8 per cent estimate for FY25. The governor's address suggests a more adaptable strategy regarding inflation targeting."

 

Chopra continued, "The proposed measures are expected to enhance the money supply within the economy, improve liquidity, promote borrowing, and stimulate consumer demand. The anticipated action is likely to lower borrowing expenses, which may enhance credit accessibility and stimulate demand across various sectors.  Nevertheless, challenges such as the declining value of the rupee, which could elevate import expenses, along with external economic uncertainties, are critical elements to observe. The declining value of the rupee serves as a significant factor that may affect the Reserve Bank of India's decision, as additional reductions could exert pressure on the Indian rupee and lead to increased capital outflows from the nation."

4:02 PM

'Finance Minister should have abolished TDS on interest income'

According to Faisal Farooqui, CEO and Founder, Mouthshut.com and an Independent seed funder, "The Finance Minister should have abolished TDS on interest income, property sales, and dividends. With PAN-Aadhar linked tracking already in place, TDS is unnecessary and only locks up capital that could alternatively be used for household consumption and business investment, driving economic growth."

 

Farooqui added, "TCS on LRS is another misstep. Most outward remittances come from tax-paid income, yet withholding 5-20% raises costs and disrupts cash flow. At a time when the rupee is weakening, India needs a more strategic approach to forex management, not measures that make global transactions costlier and more restrictive."

3:53 PM

'Rate reduction is bound to provide much-needed boost to economy'

According to Tushar Aggarwal, Founder & CEO, Stashfin, India’s leading financial services platform, “The RBI’s first repo rate reduction in five years by 25 basis points to 6.25 per cent will potentially lower the cost of borrowing for banks. In turn, this will make loans more affordable for borrowers. In the backdrop of the Union Budget 2025, this is good news since borrowers have only seen interest rates either stagnate or rise in the past few years. Thanks to this decision, one expects banks and financial institutions will lower lending rates. This should thereby make loan EMIs more affordable. Given the recent relief in income tax rates in the Budget, middle-class borrowers will be better placed with more disposable income in their hands. Overall, the rate reduction is bound to provide a much-needed boost to the economy.”

3:42 PM

'Rate cut should encourage private investments'

According to Shravan Shetty, Managing Director, Primus Partners, "The drop in repo rate by 25 basis points by the MPC is a welcome move which should help drive investments. It is in sync with the budget which has focused on driving up demand and improve utilization. The rate cut coupled with liquidity measures taken by RBI like OMO and VRR auction should encourage private investments as utilizations are expected to go up due to increasing demand." 

 

Shetty added, "Going forward,  there are headwinds primarily from the possibility of tariffs rising globally, this could lead  to inflationary pressure. Hence the MPC has maintained a neutral stance suggesting a cautious approach."

 

3:21 PM

'RBI has delivered required monetary policy support to economy'

According to Ranen Banerjee, Partner and Leader, Economic Advisory, PwC India, “The new RBI Governor and the MPC delivered the widely accepted 25 bps policy rate cut with policy stance as neutral leaving room for it to take further actions in its next meeting. The MPC would have got comfort from the expectation of a moderating food inflation and under check core inflation giving an inflation estimate for FY26 at 4.2%. It has delivered the required monetary policy support to the economy and this combined with the consumption boost from the tax relief announced in the budget should give momentum to demand and pushing the FY26 growth rate to the higher end of the 6.3% to 6.8% growth range anticipated in the Economic Survey.”

3:19 PM

'RBI has shot two birds with one stone'

According to Dr Vikas Prakash, Director - PGPM & Professor, Great Lakes Institute of Manegement, Gurgaon, "Heartening to see that Repo Rate reduction is in line with the spirit of the Union Budget presented on February 1. Increased disposable income announced in the budget could have well gone into savings rather than spending as desired by the government. RBI has nailed two birds with one stone. Reduced the incentive to save and reduced the cost of EMIs for buying consumer durables. This should trigger the demand. One can say that this reduction was quite expected but still the decision was tough one as it may trigger flight capital from India as the interest rate differential between US and India has narrowed."

 

3:17 PM

'New beginnings lead to progressive ways'

Commenting on the MPC meeting, Dr Ashish Andhale, Assistant Professor at the School of Economics and Commerce, MIT-World Peace University, said, "As new beginnings lead to progressive ways such decisions are also taken by our new RBI governor Sanjay Malhotra by cutting the repo rate by 25 bps. The primary and direct outcome can be seen in economic growth at an inflation rate of 4.2 per cent which is lesser than FY 24-25 4.8 per cent showing moderate inflation for the betterment. It is also a much higher step towards Aatmanirbhar Bharat showing its strength from defence to financial independence by making sure EMI’s on home and vehicle are paid pushing the threshold to greater limits."

 

2:43 PM

Sebi-registered non-bank brokers can directly access NDS-OM: RBI

The RBI said non-bank brokers registered with market-regulator Sebi can directly access NDS-OM, an electronic trading platform for secondary market transactions in government securities, on behalf of their clients. Access to Negotiated Dealing System Order Matching (NDS-OM), at present is available to regulated entities and to the clients of banks and standalone primary dealers. "With a view to widening access, it has been decided that non-bank brokers registered with SEBI can directly access NDS-OM, on behalf of their clients," the Reserve Bank of India (RBI) said. Sebi registered brokers may access NDS-OM subject to the regulations and conditions laid down by the Reserve Bank in this regard.

2:16 PM

India can certainly achieve 7% plus growth rate, says RBI Governor

Reserve Bank Governor Sanjay Malhotra said India can certainly achieve over 7 per cent growth rate and the nation should aspire for that. "I would like to stick my neck out and say that, certainly India can achieve a 7 per cent and plus growth rate. We should certainly aspire for that," he said when asked whether there was a possibility of the Indian economy growing at a faster pace.

1:33 PM

Repo rate cut to provide long-awaited relief on interest rates: Experts

Chief economist of Crisil Limited Dharmakirti Joshi said that as expected, the MPC of the central bank cut rates for the first time since May 2020. Joshi expressed hope that the MPC would cut the repo rate to another 75 basis points to 100 basis points in the next financial year. Chief Investment Officer of Axis Securities PMS Naveen Kulkarni said, "The RBI reversed the interest rate cycle by announcing a rate cut of 25 basis points. This was largely anticipated."

1:13 PM

'RBI's rate cut in line with Centre's move to offer income tax relief'

Commenting on the rate cut, Dr Jagriti Arora, Assistant Professor - Accounting and Finance, Great Lakes Institute of Management, Gurgaon, said, "To boost the economic growth, the Reserve Bank of India (RBI) has cut its repo rate by 25 basis points, bringing it down to 6.25 per cent. This is the first time the RBI has cut rates in nearly five years. The decision was made by the Monetary Policy Committee (MPC) after noting that inflation had declined and was expected to remain within the RBI's target range. The MPC also projected that inflation would average 4.2 per cent in the 2025-26 fiscal year."

 

She added, "The repo rate is the interest rate at which the RBI lends money to commercial banks. A cut in the repo rate typically leads to lower interest rates on loans for borrowers, which can encourage spending and investment. This is in line with the move made by the Centre just last week to lower personal  income tax. The RBI's decision is expected to provide a push in the same direction of escalating consumption by providing relief to borrowers and help to stimulate economic activity."

1:05 PM

'RBI's focus on balancing growth, inflation will build a more supportive environment for business'

Sanjaya Mariwala, President of IMC Chamber of Commerce and Industry and Executive Chairman & Managing Director of OmniActive Health Technologies, said, “The RBI’s move to cut the policy repo rate from 6.5 per cent to 6.25 per cent is a positive step for companies. It will ease lending, reduce some cost pressure, and stimulate demand. It is a good move, and we expect further cuts. The predicted real GDP growth rate for the current financial year is 6.7 per cent. With inflation forecasted to ease to 4.2 per cent, cutting the policy repo rate will benefit both companies and consumers."

 

Mariwala added, "We remain positive that the Reserve Bank's focus on balancing growth, inflation, and financial solidity will build a more supportive environment for business. The sector looks for policies that will further boost availability of credit, transparency in regulation, ease of doing business, and enable Indian companies to become competitive both in India and abroad.”