Good News for loan borrowers; RBI announces relief for loanee
Kanwar Inder Singh/ royalpatiala.in News/ June 6,2025
Few minutes ago, Reserve Bank of India governor Sanjay Malhotra-led Monetary Policy Committee (MPC) announced a 50 basis points cut in repo rate from 6 percent to 5.5 percent.
This is the third consecutive cut. Earlier RBI had cut 0.25 percent in last two meetings. The step brings a big cheer to loan borrowers as EMIs will come down substantially.
RBI Governor Sanjay Malhotra said ” The Monetary Policy Committee (MPC) met on the 4th, 5th and 6th of June to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.50 per cent with immediate effect; consequently, the standing deposit facility (SDF) rate shall stand adjusted to 5.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.75 per cent.”
He added “after having reduced the policy repo rate by 100 bps in quick succession since
February 2025, under the current circumstances, monetary policy is left with very
limited space to support growth. Hence, the MPC also decided to change the stance
from accommodative to neutral. From here onwards, the MPC will be carefully
assessing the incoming data and the evolving outlook to chart out the future course of
monetary policy in order to strike the right growth-inflation balance. The fast-changing
global economic situation too necessitates continuous monitoring and assessment of
the evolving macroeconomic outlook.”
Good News for loan borrowers; RBI announces relief for loanee. “The Reserve Bank remains committed to provide sufficient liquidity to the banking system. To further provide durable liquidity, it has been decided to reduce the cash reserve ratio (CRR) by 100 basis points (bps) to 3.0 per cent of net demand and time liabilities (NDTL) in a staggered manner during the course of the year. This reduction will be carried out in four equal tranches of 25 bps each with effect from the fortnights beginning September 6, October 4, November 1 and November 29, 2025. The cut in CRR would release primary liquidity of about ₹2.5 lakh crore to the banking system by December 2025. Besides providing durable liquidity, it will reduce the cost of funding of the banks, thereby helping in monetary policy transmission to the credit market. I would like to reiterate that we will continue to monitor the evolving liquidity and financial market conditions and proactively take further measures, as warranted” added Malhotra.
