New Delhi
The Reserve Bank of India (RBI) has given great relief to the common man by cutting the repo rate for the second consecutive time. Today, on 9 April, RBI decided to reduce the repo rate from 0.25 percent to 6 percent. Earlier on 7 February 2025, the RBI had reduced the repo rate by 0.25 percent to 6.25 percent. It was the first cut after May 2020 and the first revision in two and a half years. The effect of reduction in repo rates is higher on the middle class. This is because banks and financial institutions get funds at a lower cost than RBI after repo rate cuts. This can reduce home loan, auto loan and interest rates on new personal loans and reduce the burden of EMI of common people.
Let’s know the main things of the Monetary Policy meeting –
The major interest rate (repo) was reduced by 0.25 percent to 6 percent. The repo rate was cut by quarter percent for the second consecutive time.
The central bank’s monetary trend was replaced by ‘neutral’ to ‘genering’ and indicated another cut in the interest rate. This may further reduce the monthly installment (EMI) of debt for customers.
The RBI has decided to allow the National Payment Corporation of India (NPCI) to amend the transactions limit through UPI (Unified Payment Interface) as per the needs of the economy. However, the limit of transaction through UPI between one person to another will remain one lakh as before. Currently, in cases like capital markets, insurance, shopkeepers (P to M) from customers, two lakh rupees per transaction, while the payment limit for tax payment, educational institutions, hospitals, IPOs is Rs five lakh.
The growth rate of gross domestic product (GDP) for FY 2025-26 was reduced from 6.7 percent to 6.5 percent. Malhotra said that investment activities have accelerated and high capacity usage, emphasis on the government’s infrastructure, is expected to increase further investment due to improvement in better books and financial conditions of banks and companies.
RBI says that trade fee measures have further increased uncertainties, which is affecting the economic scenario in various fields. Inflation estimate for FY 2025-26 was reduced from 4.2 percent to four percent.
The RBI has issued new draft guidelines reviewing the current rules regarding the loan to be given in lieu of gold jewelery and jewelery. The RBI said that the proposed guidelines related to debt in lieu of gold are not to tighten the rules, but to consume the behavior of the lender. Explain that these loans are usually used for both consumption and income generate purposes.
The central bank proposed to expand the scope of co-ionization and release the general regulatory structure. Complete information of 54th meeting of MPC will be published on 23 April. The RBI has issued a draft guidelines on a new structure ‘Securities of Stressed Assets Framework’ for resolving stressed assets of banks and financial institutions. This new structure will promote the securitization of stuck debt. Secureization is a process in which these stranded loans are mixed into securities and then sold to investors. This will give banks a way to reduce the risk and get out of such debt.
Algi meeting from 4 to 6 June
Explain that there will be 6 meetings in the current financial year 2025-26 of RBI’s Monetary Policy Committee. The first meeting was from 7 to 9 April. Now the next meeting of MPC will be held on June 4 to 6, 2025.
