RBI Policy Reset: Repo Rate Held at 5.25% as Governor Shifts Focus to Customer Safety

MUMBAI, February 6, 2026 – The Reserve Bank of India (RBI) concluded its final monetary policy meeting of the 2025–26 fiscal year today, choosing stability over surprises. The Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, voted unanimously to keep the benchmark Repo Rate unchanged at 5.25%.

This “pause” comes after a year of aggressive monetary easing, during which the central bank cut rates by a total of 125 basis points to support economic recovery. By maintaining a “Neutral” stance, the RBI signals that while it is satisfied with current growth, it remains vigilant against emerging global risks.

Growth Optimism Amid Inflationary Spikes

The central bank revised its Real GDP growth projection for FY 2025–26 upward to 7.4%, reinforcing India’s position as the world’s fastest-growing major economy. However, the inflation outlook saw a minor “precious metal” bump.

• GDP Growth Forecast: Revised to 6.9% (Q1) and 7.0% (Q2) for the next fiscal year.
• Inflation Projection: Adjusted slightly upward to 4.0% (Q1) and 4.2% (Q2) of 2026–27, primarily due to soaring prices in the Gold and Silver markets.

New “Cyber-Shield” for Digital Users

The headline-grabbing announcement wasn’t the interest rate, but a major move in Consumer Protection. Governor Malhotra proposed a first-of-its-kind framework to compensate victims of digital fraud.

• Automatic Payouts: RBI plans to introduce a system where customers can be compensated up to ₹25,000 for losses in small-value unauthorized electronic transactions.
• Enhanced Safety: A discussion paper will explore “lagged credits” for high-risk transfers and mandatory additional authentication for senior citizens.

Empowering Small Businesses and Co-ops

In a boost to the MSME sector, the RBI doubled the limit for collateral-free loans from ₹10 lakh to ₹20 lakh. Additionally, the central bank launched “Mission SAKSHAM”, a massive capacity-building initiative aimed at training over 1.40 lakh personnel in Urban Co-operative Banks (UCBs) to strengthen their technical and governance standards.

For the common man, this policy means that while loan EMIs are unlikely to drop further in the short term, their digital money is now significantly more secure.