Overview
- The MPC unanimously kept the repo rate at 5.5% with a neutral stance, and the governor indicated space for cuts as early as December if growth weakens; two external members preferred switching the stance to accommodative.
- FY26 projections were updated to 6.8% real GDP growth and 2.6% CPI inflation, with growth seen moderating later in the year as tariff effects bite.
- Credit liberalisation steps include allowing bank finance for corporate acquisitions, raising limits on loans against shares to Rs 1 crore and IPO financing to Rs 25 lakh, and withdrawing the 2016 curbs on lending to very large borrowers.
- Prudential moves feature risk‑based deposit insurance premiums, an Expected Credit Loss provisioning framework, and revised Basel III norms on a glide path starting April 2027 to strengthen bank resilience.
- Rupee internationalisation advanced with permission for rupee loans to residents of Nepal, Bhutan and Sri Lanka, broader use of SRVA balances in corporate debt, and more FBIL benchmark currency pairs; markets cheered with stocks up, the rupee firmer and bond yields lower.