Overview

• The Reserve Bank of India reduced its key policy repo rate by 25 basis points to 6% and shifted its stance from neutral to accommodative to support economic growth.
• Public sector banks, including Bank of India, UCO Bank, and Bank of Baroda, quickly lowered their lending rates, ensuring customers benefit from the policy change.
• The RBI revised its GDP growth forecast for FY26 to 6.5% and its inflation target to 4%, citing global uncertainties and domestic challenges.
• Economists predict additional rate cuts totaling up to 100 basis points in 2025, as growth risks and trade disruptions persist.
• The central bank is exploring regulatory reforms, including a market-based framework for stressed asset securitisation and expanded co-lending guidelines, to enhance financial stability.