RBI Cuts Repo Rate to 6.25% in 6th Bi-Monthly Policy for FY25.

Banking & Finance

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) met from February 5 to 7, 2025, and released the 6th bi-monthly monetary policy for the financial year 2024-25 (FY 25). This was the first meeting chaired by Sanjay Malhotra after assuming charge as RBI Governor on December 11, 2024.


      - This session marked the 53rd meeting of the MPC and was the last one for FY 25.

      - The committee unanimously decided to reduce the policy repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points to 6.25% from 6.5%, effective immediately.

      - Consequently, the Standing Deposit Facility (SDF) rate was adjusted to 6.00%, while the Marginal Standing Facility (MSF) rate and the Bank Rate were set at 6.50%.

Main Point :-   (i) RBI projected real GDP growth for FY 26 at 6.7% in Q1 (April-June 2025), 7.0% in Q2 (July-September 2025), and 6.5% in Q3 & Q4.

      (ii) RBI projects retail inflation at 4.2% for FY 26 while retaining the 4.8% forecast for FY 25; introduces 'bank.in' and 'fin.in' domains to enhance cybersecurity.

(iii) RBI to implement AFA for cross-border digital transactions, allow non-bank brokers access to NDS-OM, form a panel on market timings, and defer LCR & project financing norms to 2026.
About RBI

Governor : Sanjay Malhotra
Headquarter : Mumbai
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