Key interest rates reduced by 0.25%: RBI.
The Reserve Bank of India (RBI) has reduced the repo rate by 0.25%, bringing it down to 6.25%. This decision provides relief to borrowers, allowing banks to lower interest rates on loans such as home, car, and education loans. The move comes after the first RBI MPC meeting under Governor Sanjay Malhotra.
New Delhi: The Reserve Bank of India (RBI) has announced a significant relief for borrowers. The Monetary Policy Committee has decided to reduce the repo rate by a quarter percent. As a result, the repo rate has decreased by 0.25% or 25 basis points (bps), bringing it down from the current 6.50% to 6.25%. This decision will pave the way for banks to lower interest rates on home loans, car loans, education loans, corporate loans, and personal loans. The RBI MPC results were announced by the new Governor, Sanjay Malhotra.
This was the first RBI Monetary Policy Committee (MPC) meeting since Sanjay Malhotra assumed office as the RBI Governor. The decisions taken in this meeting were revealed by him on Friday. Banks will now collect the Standing Deposit Facility (SDF) rate when deposits are made without collateral at RBI. The SDF rate has been set at 6%, while the Marginal Standing Facility rate and the bank rate have been set at 6.5%, as announced by Sanjay Malhotra.
This is the first time since the COVID crisis (May 2020) that RBI has reduced the repo rate. From May 2020 to April 2022, the RBI repo rate was consistently at 4%. From April 2022 to February 2023, it remained steady at 6.5%. Since then, the repo rate has remained unchanged at 6.5% until today.
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