On August 6, 2025, the Reserve Bank of India (RBI) announced its monetary policy, keeping key interest rates unchanged. The Monetary Policy Committee (MPC) decided to maintain the policy repo rate at 5.50%, with the standing deposit facility (SDF) rate at 5.25% and the marginal standing facility (MSF) rate and Bank Rate at 5.75%. This decision aligns with the goal of keeping Consumer Price Index (CPI) inflation at 4% and supporting economic growth. The RBI has projected a real GDP growth of 6.5% and a CPI inflation rate of 3.1% for 2025-26. In terms of new measures, the RBI plans to standardize procedures for the settlement of deposit accounts of deceased bank customers. Additionally, to enhance the Retail Direct portal, an auto-bidding facility has been introduced for Treasury bills, allowing retail investors to systematically plan their investments in government securities.
A. Resolution of Monetary Policy Committee
The various decisions taken in the meeting of Monetary Policy Committee are as follows.
(Link: RBI Monetary Policy- Resolution, Governor Statement Dated 06/08/2025)
- To maintain the policy repo rate at 5.50 per cent. Consequently, the standing deposit facility (SDF) rate under the liquidity adjustment facility (LAF) remain unchanged at 5.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.75 per cent.
- This decision is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
- To maintain neutral stance. After having reduced the policy repo rate by 100 bps in quick succession since February 2025, monetary policy is left with very limited space to support growth.
- The real GDP growth projected for 2025-26 at 6.5%. (previous estimate 6.5%)
- The CPI Inflation projected for 2025-26 at 3.1%. (previous estimate 3.7%)
- The updated policy rates are Repo- 5.50%, SDF- 5.25%, MSF and Bank Rate- 5.75%, CRR- 3.0%,SLR- 18.0%, Fixed Reverse Repo- 3.35%.
B. Related Notifications issued by RBI
No such notifications are issued this time, in absence of any regulatory changes..
C. Statement on Development and Regulatory Policies
The various measures set out are as follows.
(Link: RBI Monetary Policy- Development & Regulatory Policies Dated 06/08/2025)
I. Regulations
Standardisation of procedure for settlement of claims in respect of deposit accounts of deceased customers of banks: Under the extant provisions, nomination facility is available in respect of deposit accounts, articles kept in safe custody or safe deposit lockers. With a view to enhance customer service standards, it has been decided to streamline the procedures and standardise the documentation to be submitted to the banks. A draft circular in this regard to be issued for public consultation.
II. Financial Markets
Introduction of Auto-bidding facilities in RBI Retail Direct for Investment and Re-investment in T-bills: The Retail Direct portal was launched in November 2021 to facilitate retail investors to open their Gilt accounts with the Reserve Bank under the Retail Direct Scheme. The scheme allows retail investors to buy Government Securities (G-Secs) in primary auctions as well as buy and sell G-Secs in the secondary market. To enable investors to systematically plan their investments, an auto-bidding facility for Treasury bills (T-bills), covering both investment and re-investment options, has been enabled in Retail Direct.
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Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)
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