RBI MPC meeting updates: CRR cut to aid transmission, improve credit growth; IndusInd bank issue should settle down very soon, says Malhotra

RBI today's monetary policy communication was action packed - innovative, out of the box, says SBI chairman

CS Setty, Chairman at SBI and IBA:

“A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.

The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty.”

Reduction in repo rates to have positive impact on Auto sector, says SIAM president

SIAM President on RBI Repo Rate Cut:

Responding to the rate cut by 50 basis points to 5.5% from 6% by RBI, Shailesh Chandra, President, SIAM and Managing Director of Tata Passenger Vehicles Ltd & Tata Passenger Electric Mobility Ltd. said, “Such reduction in repo rates would have a positive impact on the Auto sector since it would lead to increased accessibility to finance at reduced costs, thereby creating a positive sentiment amongst the consumers in the market.”

RBI’s proactive measures are poised to spur automotive retail, says Renault India's country CEO

Venkatram Mamillapalle, country CEO & managing director, Renault India:

The Reserve Bank of India’s decision to reduce the repo rate by 50 basis points to 5.5%, marking a cumulative 100 bps cut in recent months (25bps cut in Feb 2025, followed by 25bps in April 2025 and 50 bps in June ), is a welcome and timely move.

Combined with a significant 100 bps reduction in the Cash Reserve Ratio (CRR), which releases ₹2.5 lakh crore into the banking system, this policy is expected to strengthen liquidity and accelerate the transmission of lower interest rates to consumers, which will spur demand in the economy. For the automotive sector, this translates directly into improved access to affordable vehicle financing, especially in the entry and mid-level segments.

The reduction in CPI inflation forecast to 3.7% for FY26 will likely increase real disposable income, supporting consumer sentiment. With private consumption already on a healthy trajectory and the festive season on the horizon, we expect this policy environment to drive demand further. Moreover, robust gross FDI despite global headwinds reaffirms India’s attractiveness as a long-term investment destination.

The RBI’s proactive measures are poised to spur automotive retail, enhance customer affordability, and strengthen the economic cycle. We are optimistic that FY2025-26 will see an upward growth trajectory for the auto industry, powered by favorable macroeconomic indicators, strong fundamentals, and evolving consumer confidence," said Mr. Venkatram Mamillapalle, Country CEO & Managing Director, Renault India

RBI MPC meeting live: CRR cut suffices for now but 'do not hold me to this number', says RBI Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra on June 4 said the Monetary Policy Committee’s (MPC) decision to cut cash reserve ratio (CRR) by 100 basis points (bps) may suffice for now, but it should not be seen as a longer term move. Read more

RBI delivers 100 bps cut in CRR: 'This infusion of liquidity is a timely move,' say market experts

RBI Governor Sanjay Malhotra on June 6 announced the outcome of the central bank's Monetary Policy Committee's (MPC) meeting. RBI has reduced its policy repo rate by 50 basis points to 5.5 percent, and has changed its stance to 'neutral' from 'accommodative'. RBI also cut the cash reserve ratio (CRR), which banks are required to hold, by 100 basis points to 3% with an aim to accelerate policy transmission and boost lending. Read more

RBI MPC meeting live: Past repo rate cuts show markets have mostly rallied in the months after MPC decisions

The RBI Governor’s larger-than-expected rate cut of 50 bps along with a 100 bps cut in the Cash Reserve Ratio for banks - seen as a step to boost domestic demand – has triggered a sharp rally in rate-sensitive shares, taking key indices higher. Read more

RBI MPC meeting live: RBI's 50 bps rate cut may finally give an impetus to affordable housing, say experts

The Reserve Bank of India's (RBI) move to cut its benchmark repo rate by 50 basis points (bps) to 5.50 percent may finally provide an incentive for more buyers of entry-level homes to definitively enter the housing market in the affordable category, which has been sluggish for the past two years but have shown green shoots in recent months due to above-normal price increases for higher-category residences. Read more

RBI MPC meeting live: 'We’ve done our bit', RBI's message to govt on growth

In a clear signal to the government, the Reserve Bank of India (RBI) on June 6 said it has front-loaded its monetary support to the economy and now expects other levers, especially fiscal policy, to drive growth. The central bank cut the benchmark repo rate by 50 basis points to 5.5 percent and shifted its policy stance from “accommodative” to “neutral”. Read more

RBI MPC meeting live: IndusInd Bank shares rise 4% post-RBI officials' comments on the lender

IndusInd Bank Ltd's shares rose over 4% on June 6 post-RBI officials' comments on the lender's recent troubles, including accounting lapses.

"IndusInd Bank has taken enough steps to improve accounting practices. The bank is doing well on the whole," said Reserve Bank of India Governor Sanjay Malhotra at the post-monetary policy press conference in Mumbai. Read more

RBI MPC meeting live: Gold loan stocks rally as RBI hikes loan-to-value ratio limit to 85%, eases small loan norms

Gold finance stocks were buzzing in trade on June 6 after RBI Governor Sanjay Malhotra stated that the loan-to-value for gold loans below Rs 2.5 lakh is set to be revised to 85 percent from 75 percent,  giving NBFCs greater lending flexibility. This led to sharp buying in gold financiers like Muthoot Finance, Manappuram Finance, and IIFL Finance, with their stocks rising between 2 to 7 percent. Read more

RBI MPC meeting live: Depositors need to brace for lower FD rates, rethink savings strategy

The Reserve Bank of India's (RBI) 50 basis-point repo rate cut to 5.5 percent on June 6, has significant implications for depositors. With this third consecutive rate reduction since February 2025, banks are expected to lower their fixed deposit (FD) interest rates, impacting risk-averse investors and senior citizens who rely on stable returns. Read more

RBI MPC meeting live: Experts pitch 14 rate-sensitive stocks after RBI surprises with larger repo cut, CRR action

The RBI’s Monetary Policy Committee (MPC) surprised the street with a front-loaded 50 basis points repo rate cut to support economic growth, while changing the policy stance from ‘accommodative’ to ‘neutral’ on June 6, along with a cut in the cash reserve ratio (CRR). Five of the six RBI MPC members voted for the 50 bps cut, which was above analysts’ expectations.

Moneycontrol has collated a list of top 14 rate sensitive stocks from experts with short term perspective. The stock price of June 5 is considered for the calculation of returns. Read more

RBI MPC meeting live: Nifty Realty top sectoral gainer on RBI's steep rate cut

Realty shares rallied sharply on Friday, with the Nifty Realty index topping sectoral charts after the Reserve Bank of India (RBI) delivered a larger-than-expected interest rate cut of 50 basis points and also lowered the cash reserve ratio to infuse additional liquidity into the banking system. Read more

RBI MPC meeting live: Experts react after RBI's repo rate and CRR cuts

Mayank Jain, CEO, KREEVA - "The RBI’s bold move to cut the repo rate by 50 basis points to 5.5% and the CRR by 100 basis points to 3% is a booster for the real estate sector. The reduced borrowing cost will not only strengthen homebuyers' sentiments but also help in easing the liquidity flow in the market. In light of significant market volatility and real estate witnessing a surge in the investment flow, this proactive approach signals the central bank's strong commitment to thrust economic momentum and boost investor confidence."

Sahil Agarwal, CEO, Nimbus Realty says "The RBI’s 50 bps repo rate cut marks a cumulative reduction of 1% in just six months and will catalyse the real estate sector's growth. Combined with the phased 100 bps CRR cut, will infuse liquidity into the banking system, lowering borrowing costs and expanding credit availability for homebuyers. For instance, on a Rs. 1 crore home loan (20-year tenure), borrowers can now save up to Rs. 6,000 per month. Moreover, it also underscores RBI’s faith in India’s economic resilience, easing inflation concerns and fostering long-term growth optimism."

RBI MPC meeting live: The press conference has concluded

MPC meeting live: In response to rate cut, short end of yield curve in bonds is faster than long term, says RBI DG Rabi Sankar

RBI MPC meeting live: Covid not a concern as of now, no major impact on economy due to India-Pak conflict, says governor

RBI Governor Sanjay Malhotra (press conference): Rise in COVID cases not a concern for now. There was no major supply chain or economic activity disruption due to the India-Pak war, and whatever little impact it had has been normalised now.

RBI MPC meeting live: RBI concerned about crypto as it can hamper financial stability and monetary policy

RBI governor Sanjay Malhotra express concerns about crypto, saying it can hamper financial stability and monetary policy.

RBI MPC meeting live: Each crisis gives us some lessons, says RBI DG Swaminathan Janakiraman

RBI DG Swaminathan Janakiraman: Each of the crisis in banking sector gives us some lessons, this helps us sharpen our supervisory tools. Going forward, we will look for this kind [IndusInd] of red flags, so that they are in a position to anticipate crisis in terms of succession planning, he said.

RBI MPC meeting live: IndusInd Bank has taken enough steps to improve accounting practices, says Malhotra

RBI MPC meeting live: IndusInd Bank has taken enough steps to improve accounting practices, says RBI governor Sanjay Malhotra. The bank issue should settle down very soon. No systemic impact arising out of the issue, says Malhotra. Will keep monitoring the banking system.

Monetary policy is a necessary but not a sufficient condition, says Malhotra

RBI governor Sanjay Malhotra: Monetary policy is a necessary but not a sufficient instrument. Demand also has to be there so it will also depend on other market conditions. Market forces will certainly be able to push for better prices.

RBI MPC meeting live: LTV for loans below Rs 2.5 lakh to be revised to 85% from 75%

RBI MPC meeting live: No change in FDI limits, no change in foreign holdings cap in banks in near term, says Malhotra

Will release final gold loan guidelines by today or tomorrow, says Malhotra

RBI governor Sanjay Malhotra: There was nothing new in the draft norms on gold loans. We have consolidated all other norms. We have seen some regulated entities were not following the norms because there was no clarity hence we have consolidated it. We will today or by Monday morning release the final guidelines.

RBI MPC meeting live: CRR, repo rate cut to increase credit flow, says Malhotra

RBI Governor Sanjay Malhotra (press conference): Confident that CRR & repo rate cut will increase flow of credit; not able to quantify the extent. Liquidity is sufficient, we have not given it any thought to any targeted level of call rate

RBI MPC meeting live: 3% CRR looks comfortable to us as of now, says Malhotra

RBI Governor Sanjay Malhotra (press conference): While 3% appears to be a comfortable reserve ratio for now, it's important to note that this may change in the future. Please don't hold me to this exact figure, we're not committing to maintaining this level indefinitely, but at present, it seems sufficient.

RBI MPC meeting live: Impact of CRR cut will be in the second half, says governor Malhotra

RBI MPC meeting live: We need transmission faster hence we have frontloaded our actions, says governor Malhotra

RBI MPC meeting live: No voting per se on stance but all views considered, says Malhotra

RBI Governor Sanjay Malhotra (press conference): There was no voting per se on the stance but the views of all MPC members were taken into account.

RBI MPC meeting live: All 6 members of MPC decided to change the stance to neutral, says governor Malhotra

RBI MPC meeting live: If there are opportunities to build reserves, we will do it, says Malhotra

If there are opportunities to build reserves, we will do it, said RBI governor Sanjay Malhotra on June 6.

"The message is clear that Inflation is under control and we have won the fight with higher inflation. Growth is at good level, but there is more room for growth. We could have done the CRR cut after 4 months as well, but we frontloaded it to boost sentiments," he said.

RBI MPC meeting live: Liquidity currently abundant, says RBI governor

RBI Governor Sanjay Malhotra: Liquidity in the system is currently abundant. If we conduct any VRRR operations, the rate will remain at 5.0%. However, if we opt for VSRR (Variable Rate Standing Reverse Repo) or other modes, we have the flexibility to adjust the rate accordingly. At this point, we haven’t made a decision and it will depend on how the liquidity situation evolves, and we’ll take a call as needed.

We let the market to determine prices, says RBI governor

Our policy is clear and consistent, we do not manage any band, target on currency exchange rate. We let the market to determine prices, said RBI governor.

MPC has limited scope for monetary policy, says RBI governor

The monetary policy committee now has a limited scope to boost growth, which is why the stance was changed to neutral, said  RBI governor Sanjay Malhotra.

RBI MPC meeting live: RBI governor Sanjay Malhotra, deputy governors to address media soon

MPC's decisions imply ball now in banks' court to ease financial conditions, says Emkay Global chief economist

Madhavi Arora, Chief Economist, Emkay Global: The RBI appears to have front-loaded all policy actions, be it higher-than-expected rate cuts or infusing durable albeit staggered liquidity via lower CRRs. All of that now implies that the ball is in the banks’ court to transmit easier financial conditions faster.

RBI MPC meeting live: RBI's bumper 50 bps rate cut, other key factors behind market rise

The benchmark equity indices staged a sharp rebound on Friday, with the Sensex surging over 1,000 points from its intraday low and the Nifty trading above the 24,900 mark, after the Reserve Bank of India (RBI) delivered a higher-than-expected 50 basis points repo rate cut and announced liquidity-boosting measures.

Here are the key drivers behind Friday’s market rally:

Developers will be able to access more capital for their projects, says Anarock group chairman

Anuj Puri, Chairman – ANAROCK Group:

The reduction in the Cash Reserve Ratio (CRR) will help boost liquidity in the banking system, which means that banks have more funds to lend. Developers will be able to access more capital for their projects, and this can positively impact project completion timelines. It also gives banks the option to reduce home loan interest rates, which will have again positively impact sentiment in the affordable and mid-income segments.

Nevertheless, these positive impacts may be partially dampened by the ongoing global trade tensions and tariffs imposed by the Trump administration, which have increased the cost of imported construction materials and created economic uncertainty. We may see some impact on the demand for luxury and commercial projects, and developer margins may be squeezed.

While the rate cut is a strong positive for real estate, especially for affordable housing, much now depends on how well it can adapt to higher input costs and ongoing global uncertainties. Continued policy support and a shift to domestic sourcing could be critical for sustained growth.

Boost for affordable housing, says Anarock group chairman

Anuj Puri, Chairman – ANAROCK Group:

As widely anticipated, the RBI decided to reduce the repo rates by 50 bps (to 5.5%) to the backdrop of moderating inflation in the country. This is the third consecutive time this year that the apex bank has cut the repo rates. This effectively lowers the cost of borrowing, making home loan EMIs easier on the pocket and thereby directly improving affordability for buyers. This can potentially boost demand in the Indian real estate sector, especially in affordable and mid-income segments. Affordable housing faced the sharpest pandemic fallout, with sales and new launches shrinking in the top 7 cities.

ANAROCK data shows that affordable housing sales share plummeted from 38% in 2019 to 18% in 2024, while its supply share dropped from 40% to 16% in the same period. However, a 19% dip in unsold stock hints at sustained demand led by end-users. It will also lower developers’ borrowing costs. It is sincerely hoped that banks pass on the benefits of this move seamlessly to borrowers.

RBI MPC meeting live: Bajaj Finance, SBI Cards, other FinNifty shares rally up to 4%

The shares of Bajaj Finance, SBI Cards and others non-banking financial services (NBFC) strongly surged on June 6 after Reserve Bank of India (RBI) Governor Sanjay Malhotra announced the outcome of MPC's meeting, which included a bumper 50 bps key rate cut and 100 bps reduction in Cash Reserve Ratio (CRR). Read more

RBI MPC meeting live: RBI MPC's rationale for monetary policy decisions

RBI governor Sanjay Malhotra: Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target with signs of a broad-based moderation. The near-term and medium-term outlook now gives us the confidence of not only a durable alignment of headline inflation with the target of 4 per cent, as exuded in the last meeting but also the belief that during the year, it is likely to undershoot the target at the margin. While food inflation outlook remains soft, core inflation is expected to remain benign with easing of international commodity prices in line with the anticipated global growth slowdown. The inflation outlook for the year is being revised downwards from the earlier forecast of 4.0 per cent to 3.7 per cent. Growth, on the other hand, remains lower than our aspirations amidst challenging global environment and heightened uncertainty.

Thus, it is imperative to continue to stimulate domestic private consumption and investment through policy levers to step up the growth momentum. This changed growth-inflation dynamics calls for not only continuing with the policy easing but also frontloading the rate cuts to support growth. Accordingly, the MPC voted to reduce the policy repo rate by 50 bps to 5.50 per cent. Dr. Nagesh Kumar, Prof. Ram Singh, Dr. Rajiv Ranjan, Dr. Poonam Gupta and Shri Sanjay Malhotra, voted to decrease the policy repo rate by 50 bps. Shri Saugata Bhattacharya voted for a 25 bps cut in repo rate.

Significant relief for homebuyers across the country, says Signature Global founder

Pradeep Aggarwal, founder & chairman, Signature Global (India): 

The twin reduction of the repo rate by 50 basis points to 5.50% and cash reserve ratio by 100 basis points to 3% respectively by the RBI provides significant relief for homebuyers across the country. This bold move by the apex bank comes at a crucial time when inflation is easing, and the economy requires strong stimulus to sustain growth. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. The reduction in CRR is expected to infuse significant liquidity in the banking system, which will prompt banks to lend even more.

The demand for mid and premium segment homes has already been on the rise following previous rate cuts, and this larger reduction will further accelerate interest from both homebuyers and investors. Additionally, the positive market sentiment around the possibility of further rate cuts this financial year bodes well for the real estate sector, paving the way for sustained growth and renewed confidence in the housing market.

Rate cut will positively influence India's economic momentum, says PB Fintech chairman

The Reserve Bank of India’s decision to reduce the repo rate by 50 basis points to 5.5% underscores a clear commitment to supporting growth, said Yashish Dahiya, Chairman & Group CEO of PB Fintech.

“Coupled with the shift to a neutral stance, it signals a more balanced and measured approach going forward. This move will ease borrowing costs and enhance liquidity, benefiting MSMEs and retail loan borrowers. Overall, we believe this step will positively influence India’s economic momentum amid global headwinds.”

RBI MPC meeting live: 50 bps rate cut to lower borrowing costs for buyers and developers, says Colliers India national head

Vimal Nadar, National Director & Head, Research, Colliers India

The RBI has reduced the repo rate further by a strong 50 bps - bringing it down to 5.5%, the lowest in almost three years. The third consecutive reduction in benchmark lending rate coupled with shifting to neutral stance reaffirms the growth-supportive monetary policy aided by softening of inflation levels. Despite external volatilities and evolving trade scenarios, the Central Bank projects the domestic economy to grow at 6.5% in Fiscal 2025-26. For the real estate sector, this move is a strong tailwind: it lowers borrowing costs for buyers & developers, boosts homebuyer confidence, and enhances affordability, especially in the affordable and mid-income housing segments. This could lead to improved buyer sentiment, an increase in residential property enquiries and conversions, and a pickup in sales volumes across key urban markets. Over the medium term, the reduction in the cost of capital is also expected to enhance investor confidence, potentially boosting activity in both residential and commercial real estate segments

RBI decision to boost consumption, stimulate domestic growth, says Samco Mutual Fund CIO

Umeshkumar Mehta, CIO, SAMCO Mutual Fund:

A third straight cut in the repo rates this year with 50 bps cut instead of an estimate of 25 bps is a pleasant move. This demonstrates a pro-growth stance and a front-loading of rate cuts given our stable economic growth and declining inflation. A change in policy stance from accommodative to neutral is also justified as it can help to strike a right balance between growth and inflation, especially if geopolitical issues escalate further. Today’s policy levers are expected to boost consumption, stimulate domestic growth, and ensure liquidity amongst the varied global challenges

RBI MPC meeting live: Relief for borrowers as home loan EMIs set to fall significantly

The Reserve Bank of India (RBI) cut its policy rate by 50 basis points (bps) on June 6, its third reduction since February 7, 2025, paving the way for lower home loan interest rates. The RBI's repo rate cut will directly benefit home loan borrowers, especially existing ones, by reducing their interest burden.

Check how will the repo rate cut benefit borrowers. 

RBI MPC meeting live: Unsecured personal loans stress abated, says governor

RBI governor: The stress witnessed earlier in retail segments like unsecured personal loans and credit card receivables portfolio has abated, while the stress in micro-finance segment is persisting. Banks and NBFCs active in these segments are already recalibrating their business models, strengthening their credit underwriting practices and stepping up their collection efforts to avoid any excessive build-up of risks on this front in future.

Fixed deposit rates to come down sharply, says IndiaBonds co-founder

Vishal Goenka, Co-Founder of IndiaBonds.com:

“A hawkish Deep rate cut by RBI : Front loading of rate cuts by RBI addresses the need to spur growth as short end rates come down aggressively which in turn will assist corporate borrowing through capital markets for the short end. The growth expectations remained at 6.5% for FY26 and inflation expectations lowered to 3.7%.

However we see a large curve steepening as long end rates remain relatively unchanged with RBI stance changing to neutral from accommodative. This implies that further room to cut rates remain limited and data dependent.

A balanced policy encouraging growth. Fixed deposit rates to come down sharply as banks transmit this rate cut. Investors should look at 2-3y corporate bonds for their portfolio as they continue to offer good spreads over government and FD rates and interest rates will come down more gradually for corporate bonds.”

50 bps rate cut signals RBI’s unwavering commitment to growth, says Sapient Finserv director

Pallav Bagaria, Director at Sapient Finserv:

“Even rain gods can’t stop smiling and neither can the markets. A bold 50 bps rate cut signals the RBI’s unwavering commitment to growth. With good macros backing it, RBI has actually shown the world that this isn’t just a policy — this is 'Policy making – A Make in India initiative'. I think the cage is open for the ‘emerging market’ bird to fly.”

50 bps negative from market perspective for near-term, says VK Vijayakumar

VK Vijayakumar, Chief Investment Strategist, Geojit Investments:

The higher-than-expected 50bp rate cut decision by the MPC, though positive for growth is slightly negative from the market perspective for the near-term. This big rate cut is, as the RBI Governor remarked, front-loading of the rate cut. The change in monetary stance from accommodative to neutral also indicates that more rate cuts are unlikely unless the situation warrants.

This big rate cut will impact the margins of the banks and, therefore, bank stocks will be under pressure in the near-term. However, the credit growth that this rate cut will hopefully stimulate will compensate for the dip in margins.