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1h ago

RBI Holds Rate at 5.5%, Rules Out UPI Fees for Now, Unveils Credit and Rupee Reforms

Malhotra said UPI’s costs must be funded sustainably as the package opens takeover financing, lifts market-linked loan caps, and pushes regional rupee use.

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Reserve Bank of India

Overview

  • The Monetary Policy Committee kept the repo rate at 5.5% with a neutral stance, maintaining flexibility as earlier easing continues to transmit and external trade risks persist.
  • RBI raised its FY26 real GDP growth forecast to 6.8% and lowered the inflation outlook to 2.6%, pointing to disinflation and the impact of GST reductions.
  • Banks can now finance mergers and acquisitions, the cap on loans against shares rises to Rs 1 crore, the individual IPO financing limit doubles to Rs 25 lakh, and curbs on lending against listed debt are removed.
  • Steps to internationalise the rupee include allowing rupee-denominated loans to residents of Nepal, Bhutan and Sri Lanka, expanding FBIL reference currency rates, and permitting SRVA surpluses to be invested in corporate bonds and commercial paper.
  • The governor said there is no proposal to levy UPI charges, reiterated that operating costs must be covered for sustainability, noted 19.63 billion UPI transactions in September per NPCI, and confirmed phone-locking for EMI defaults is still under examination.