While the Reserve Bank of India kept the key repo rate unchanged at 5.25 per cent on Friday, the apex financial institution of the country also paired the status quo on interest rates with a series of measures aimed at protecting bank customers, boosting small businesses and strengthening cooperative banks.
RBI Governor Sanjay Malhotra said the Indian economy is in “a good spot” with strong growth and low inflation, allowing the central bank to support growth while guarding financial stability.
The Monetary Policy Committee (MPC) met from February 4 to 6 and unanimously voted to hold the repo rate at 5.25 per cent, with the standing deposit facility at 5.00 per cent and the marginal standing facility and Bank Rate at 5.50 per cent; the policy stance remains neutral.
Real GDP growth for 2025-26 is pegged at 7.4 per cent, and projections for the first two quarters of 2026-27 have been revised up to 6.9 per cent and 7.0 per cent, respectively, supported by robust consumption, investment and recent trade deals.
What is in it for you and me?
For ordinary customers like you and me, the RBI announced a tighter framework on the mis-selling of financial products and fair conduct by recovery agents, with draft guidelines to be issued soon.
The apex bank will also review rules on unauthorised digital transactions and introduce a compensation framework for small-value frauds, with a proposal to compensate up to Rs 25,000 in such cases, according to Malhotra.
For this, RBI is set to publish a separate discussion paper that will explore safeguards in digital payments, including lagged credit and extra authentication for vulnerable users like senior citizens.
Easier loans for smaller consumers
To improve access to credit, the RBI plans to raise the collateral-free loan limit for micro and small enterprises from Rs 10 lakh to Rs 20 lakh from April 1, 2026.
Banks will be allowed to lend to Real Estate Investment Trusts (REITs) under prudential safeguards, potentially supporting real estate financing. Urban cooperative banks will get more flexibility on unsecured loans and housing loan norms, and a new Mission SAKSHAM will train about 1.4 lakh personnel to strengthen this sector.
The central bank also moved to deepen financial markets, including easing the Voluntary Retention Route for foreign investors in debt, enabling derivatives on corporate bond indices and total return swaps, and giving authorised dealers more freedom in foreign exchange dealings.
Home loan EMIs stay the same
Since there are no marked reductions in policy rates, it is unlikely that your home loan EMIs are going to get lower this time. Sterling Developers Chairman & MD Ramani Sastri is of the opinion that maintaining the status quo will keep the ongoing residential real estate sales momentum on course, offering homebuyers assurance of steady loan terms. However, he hopes for more rate cuts in the future. "A supportive interest-rate environment plays a crucial role in sustaining homebuyer confidence, and hence, we would definitely welcome further rate cuts in the near term, thereby boosting affordability and further investments in the sector," said Sastri.
On a broader market sense, "easier credit availability attracts both individual and institutional investors, driving new investments into commercial real estate," chimed in Manas Mehrotra, founder of coworking firm 315Work Avenue.
Market analysts such as Samantak Das, Chief Economist and Head – Research and REIS, India, JLL, also state that the current policy stance is unlikely to adversely affect the real estate sector's prevailing momentum. "Inflation exhibits seasonal patterns and is anticipated to rise modestly in the near term. Against this backdrop, market participants will closely monitor the transmission effects of earlier rate reductions, particularly regarding home loan interest rates," said Das.