News

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

Banking & Finance | Dated: 12 Feb 2025

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.

🎯 Key Highlights:

- 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%.

💡 Other Important Facts:

(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.

📚 Test Your Knowledge:

Who recently chaired the RBI MPC meeting for the first time after assuming charge as RBI Governor?

Correct Answer: Sanjay Malhotra

🚀 Quick Recap:

About RBI

Governor : Sanjay Malhotra
Headquarter : Mumbai