RBI repo rate News

Bank FD Rates 2025: Many government-owned banks in India have recently raised their fixed deposit (FD) interest rates, presenting a great opportunity for low-risk investors to secure better returns.  

RBI Repo Rate Cut: In addition to the repo rate cut, the RBI also reduced the Cash Reserve Ratio (CRR) by 100 basis points, from 4 per cent to 3 per cent. 

The Reserve Bank has said it will continue to undertake liquidity management operations in sync with the monetary policy stance to keep system liquidity adequate to meet the productive requirements of the economy. 

RBI Repo Rate: Meanwhile, private sector major HDFC Bank has lowered interest rate on savings accounts by 25 basis points to 2.75 per cent which is the lowest among peers in the private sector. 

RBI Repo Rate: Reserve Bank Governor Sanjay Malhotra announced a major proposal to liberalise the RBI’s co-lending guidelines for banks and NBFCs to expand their ambit beyond priority sector lending, to which they are currently restricted. 

The rate cut can enhance liquidity in the banking system and will also revive consumption and fiscal discipline. 

The RBI kept the repo rate unchanged at 6.5 percent in its August bi-monthly review amid risks from higher food inflation.

Retail inflation has remained above the RBI's upper tolerance level of 6 per cent for two months and in February it was 6.44 per cent.

Asian Development Bank also expects India's economic growth to moderate to 6.4 per cent due to tight monetary conditions and elevated oil prices, as compared to 6.8 per cent expansion for the financial year ended March 2023.

Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.

Crisil's research wing said it now expects the average consumer price inflation for FY23 to come at 6.3 per cent. The RBI hiked its key rate by 0.40 per cent in a surprise move last week.

Also, several PSU banks have not responded when asked if they planned to go for the external benchmark linking with repo rate.

The new rates linked the external benchmark rate of the repo rate, will be effective May 1, the bank said in a late evening statement.

In the policy review meet earlier this month, majority of RBI's six-member MPC favoured to keep the key repo rate unchanged.

After two successive hikes, the repo rate currently stands at 6.50 percent.

This is the first time since October 2013 that the central bank has hiked borrowing costs at two consecutive policy meetings.

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the 6-member Monetary Policy Committee (MPC) decided to hike the rates.

Acharya was of the view that the central bank should wait for some more time before withdrawing monetary accommodation.

The six-member MPC, headed by RBI Governor Urjit Patel, had left the benchmark repo rate unchanged for the third time in a row after deliberations on April 4-5, citing inflationary concerns.