News

RBI Monetary Policy: On Wednesday, August 6, RBI Governor Sanjay Malhotra kept the repo rate unchanged at 5.5 per cent and maintained the policy stance as "neutral."

RBI noted the country's growth outlook remains healthy and inflation is expected to be under control this year, largely due to a healthy monsoon.

However, the RBI Governor pointed out that the global environment continues to be challenging.

"Although financial market volatility and geopolitical uncertainties have abated somewhat from their peaks in recent months, trade negotiation challenges continue to linger," the central bank said.

"Global growth, though revised upwards by the IMF, remains muted. The pace of disinflation is slowing down, with some advanced economies even witnessing an uptick in inflation."

The RBI Governor said that the central bank's Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 5.5 per cent and the policy stance unchanged at neutral.

In the June policy meeting, the RBI had delivered a larger-than-expected 50 bps rate reduction and revised its stance to 'neutral' from 'accommodative'.

The standing deposit facility (SDF) rate under the liquidity adjustment facility (LAF) remains unchanged at 5.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 5.75 per cent.

Despite persisting uncertainty over the Trump tariffs and global factors, the RBI maintained real GDP growth for FY26 at 6.5 per cent.

The central bank maintained its quarterly growth projections as well.

RBI projected Q1FY26 GDP growth at 6.5 per cent, Q2 at 6.7 per cent, Q3 at 6.6 per cent, Q4 at 6.3 per cent and Q1FY27 at 6.6 per cent.

Track RBI MPC Live Updates Here

The central bank highlighted that the CPI headline inflation declined for the eighth consecutive month to a 77-month low of 2.1 per cent YoY in June 2025, largely driven by a sharp decline in food inflation led by improved agricultural activity and various supply-side measures.

The central bank cut the FY26 CPI inflation forecast to 3.1 per cent from 3.7 per cent earlier. Q2FY26 inflation estimates were trimmed to 2.1 per cent from 3.4 per cent earlier, Q3 estimates were lowered to 3.1 per cent from 3.9 per cent, and Q4 estimates were maintained at 4.4 per cent.

However, the central bank expects a spike in inflation next year. The RBI projected CPI inflation for Q1FY27 at 4.9 per cent.

The RBI Governor said the Liquidity Adjustment Facility (LAF), has been in surplus. Going ahead, as the CRR cut announced in the last policy comes into effect in a staggered manner beginning September, it would further support liquidity conditions.

Credit Deposit Ratio (CD ratio) for the banking system at the end of June 2025 was 78.9 per cent, broadly similar to that an year ago.

Bank credit grew at 12.1 per cent during 2024-25. While it is slower than the growth rate of 16.3 per cent in 2023-24, it is higher than the average growth rate of 10.3 per cent recorded in the ten-year period preceding 2024-25.

The RBI Governor said banks are organising camps at the Panchayat level from 1st July to 30th September for re-KYC of Jan-dhan Scheme as a large number of accounts have fallen due for re-KYC as the scheme completes 10 years.

Apart from opening new bank accounts and re-KYC, the camps will focus on micro insurance and pension schemes for financial inclusion and customer grievance redress, the RBI Governor said.

The central bank will also standardise the procedure for settlement of claims in respect of bank accounts, and articles kept in safe custody or safe deposit lockers of deceased bank customers.

RBI is also expanding the functionality in RBI retail-Direct platform to enable retail investors to invest in treasury bills through systematic investment plans (SIP).

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Download the Mint app and read premium stories

Log in to our website to save your bookmarks. It'll just take a moment.