The RBI, in its monetary policy announcement on April 9, 2025, reduced the policy repo rate by 25 basis points to 6.00%. Consequently, SDF stands at 5.75%, and MSF and the Bank Rate at 6.25%. This decision aims to achieve the CPI inflation target of 4% (+/- 2%) while supporting growth. The real GDP growth projection for FY 2025-26 is revised to 6.5%, and CPI inflation is projected at 4.0%. The RBI also announced developmental and regulatory measures, including draft frameworks for securitization of stressed assets and co-lending arrangements, review of gold loan guidelines and non-fund based facilities. For payment systems, UPI transaction limits may be revised by NPCI. The RBI also proposed making its Regulatory Sandbox theme-neutral and on tap to foster fintech innovation.
1. Resolution of Monetary Policy Committee
The various decisions taken in the meeting of Monetary Policy Committee are as follows. (RBI Monetary Policy- Resolution Dated 09/04/2025)
– Reduce the policy repo rate by 25 basis points to 6.00 per cent with immediate effect. Consequently, the standing deposit facility (SDF) rate under the liquidity adjustment facility (LAF) shall stand adjusted to 5.75 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 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.
– The real GDP growth projected for 2025-26 at 6.5%. (previous estimate 6.7%)
– The CPI Inflation projected for 2025-26 at 4.0%. (previous estimate 4.2%)
– The updated policy rates are Repo- 6.00%, SDF- 5.75%, MSF and Bank Rate- 6.25%, CRR- 4.0%, SLR- 18.0%, Fixed Reverse Repo- 3.35%.
B. Statement on Development and Regulatory Policies
The various measures set out are as follows. (RBI Monetary Policy- Development & Regulatory Policies Dated 09/04/2025)
I. Regulations
Securitisation of Stressed Assets Framework: A prudentially structured securitisation transaction can be an enabler for resolution of stressed assets as it is expected to improve risk distribution and provide an exit route from such exposures for lenders. The draft framework for securitisation of stressed assets is being issued for public comments. It intends to enable securitisation of stressed assets through a market-based mechanism, in addition to the existing ARC route under SARFAESI Act.
Framework on Co-lending arrangements (CLA): The extant guidelines on co-lending are applicable only to arrangements between banks and NBFCs for priority sector loans. It has been decided to expand the scope for co-lending and issue a generic regulatory framework for all forms of co- lending arrangements among REs, and draft guidelines are being issued for public comments.
Review of Guidelines for Lending against Gold Jewellery: Loans against the collateral of gold jewellery and ornaments are extended by regulated entities (REs) for both consumption and income-generation purposes. It has been decided to issue comprehensive regulations, on prudential norms and conduct related aspects, for such loans and draft guidelines are being issued for public comments.
Review of Non-Fund Based Facilities: Non-fund based (NFB) facilities like Guarantees, Letters of Credit, Co-Acceptances etc. play a significant role in facilitating effective credit intermediation, besides enabling seamless business transactions, including trade transactions. It has been decided to harmonize and consolidate guidelines covering these facilities across all REs and draft guidelines are being issued for public comments.
II. Payment Systems
Enhancing transaction limits in UPI: At present, the transaction amount for UPI, covering both Person to Person (P2P) and Person to Merchant payments (P2M), is capped at ₹1 lakh except for specific use cases of P2M payments which have higher limits, some at ₹2 lakh and others at ₹5 lakh. It is proposed that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs.
III. Fintech
‘On Tap’ application facility under theme neutral Regulatory Sandbox: The Reserve Bank has been operating the Regulatory Sandbox (RS) framework since 2019, and four specific thematic cohorts have been announced and completed till date. An ‘On Tap’ application facility for themes of closed cohorts was announced in October 2021. A fifth ‘Theme Neutral’ cohort with a specified time window for receiving applications was also announced in October 2023, which will close in May 2025. It is proposed to make the Regulatory Sandbox ‘Theme Neutral’ and ‘On Tap’. This initiative is expected to foster continuous innovation and keep pace with the rapidly evolving FinTech / regulatory landscape.
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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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