🔥 RBI Cuts Repo Rate by 25 bps: Inflation Cools, Policy Turns Supportive
The Monetary Policy Committee (MPC) held its 58th meeting from December 3–5, 2025, under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The Committee noted a sharp moderation in headline inflation, which has softened more than earlier projections—primarily due to exceptionally benign food prices. Reflecting these favourable conditions, the MPC has further…
Read article RBI’s 2025 Capital Market Exposure Directions: A New Prudential Framework for Banks
Policy Context and Objectives The Reserve Bank of India has issued draft “Commercial Banks – Capital Market Exposure (CME) Directions, 2025” proposing consolidated, risk-sensitive limits on banks’ direct and aggregate exposures to capital markets, with phased implementation envisaged from April 1, 2026 subject to finalisation. The draft CME framework seeks to rationalise and unify disparate…
Read articleStatutory Liquidity Ratio (SLR) in India: Balance-Sheet Impact, Credit Transmission, and Macroeconomic Effects
The Statutory Liquidity Ratio (SLR) requires banks to hold a minimum share of Net Demand and Time Liabilities in liquid assets such as cash, gold, and government securities, shaping banks’ balance sheets, credit supply, and interest rates while supporting financial stability and government debt markets. A higher SLR restrains bank lending capacity and can firm…
Read article Cash Reserve Ratio (CRR) in India: Transmission, Bank Balance Sheets, and Macroeconomic Impact
The Cash Reserve Ratio (CRR) is a core liquidity tool of the Reserve Bank of India (RBI) that directly alters banks’ lendable resources, influences interest rates and credit growth, and transmits into inflation and output dynamics in the wider economy. Higher CRR tightens liquidity and credit conditions, while lower CRR releases primary liquidity, supporting credit…
Read article Understanding the Bank Rate in India: Evolution, Role, and Compliance Implications
Overview The Bank Rate in India is the standard rate at which the Reserve Bank of India (RBI) is prepared to buy or re-discount eligible bills of exchange or other commercial paper under Section 49 of the RBI Act, 1934. In modern practice, it functions primarily as an administered benchmark aligned with the Marginal Standing…
RBI Releases Draft Ombudsman Scheme 2025: Stronger Consumer Protection & Faster Grievance Redressal
The Reserve Bank of India (RBI) has released the draft Reserve Bank – Ombudsman Scheme, 2025, aimed at improving customer grievance redressal and enhancing accountability among regulated entities such as banks, NBFCs, and payment system operators. 🔑 Key Highlights * Higher Compensation Limits: Customers can now receive compensation of up to **₹30 lakh for…
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