Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25% in its first monetary policy announcement following the Union Budget 2026. RBI Governor Sanjay Malhotra revealed the decision after a three-day meeting of the Monetary Policy Committee (MPC) in Mumbai, stating that the move was widely expected amid stable economic conditions.
The central bank maintained its policy stance as “neutral,” indicating that interest rates are likely to remain steady in the near term. The decision comes as India continues to show strong economic growth and reduced tariff pressures after the recent trade agreement with the United States. According to the RBI, India remains one of the fastest-growing major economies despite global uncertainties.
On inflation, the RBI projected Q1 FY2026-27 inflation at 4%, slightly higher than the earlier 3.9% estimate, while retail inflation for the current financial year is expected to remain low at around 2.1%. The central bank also pegged real GDP growth for the current fiscal at 7.4%, with the next financial year forecast ranging between 6.8% and 7.2%.
Additionally, the RBI announced plans to introduce a framework to compensate customers up to ₹25,000 for small-value digital transaction frauds and draft guidelines to curb loan misselling and regulate recovery agents. These measures aim to strengthen consumer protection and financial stability in India’s banking sector.
