Banking News India: Have you heard that the RBI repo rate of India will undergo some changes in 2025? Read on this news site all about it, benefits, disadvantages, home loan interest rate and more.
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DO you know what the RBI repo rate is?
It is essentially the interest rate at which the Reserve Bank of India lends money to commercial banks for a short period. In other terms, it can also be considered a primary tool of the RBI to Control liquidity, inflation, etc. In another way, it can be said that it is a repurchasing agreement between the buyer and seller (lenders). This type of phenomenon is generally used by the Central or the state banks in India. What exactly happens in this phenomenon is that the investors invest or give cash to the borrowers with collateral security, and they charge an interest rate. Additionally, it can also be called as a secured loan as it operates a the loan structures of a bank.
What happened to the RBI repo Rate recently?
In June 2025, a major change in the RBI repo rate cut occurred, which led to a lowering of the EMI for home loan borrowers, a reduction in Fixed deposits to investors, etc. This major cut happened after the RBI MPC meeting held, and the RBI governor, Shaktikanta Jha Malhotra, declared a 50 BPS, i.e up to 5.50 per cent. This was higher than expected after the MPC meetings held. This also led reduction of the central bank cash reserve ratio CRR by 100 bps.
Experts on financial analysis stated this could impact the housing loan borrowers and FD ( fixed deposit) Account holders in India. It also mentions that it could bring relief to the home loan borrowers as the Monthly EMI may come down. It also stated that a sum of Rs 2000 will be lower for those who take a loan of Rs 50 lakhs for 20 years.
On this, the director of the RPS Group said that if a person took a housing loan of Rs 30 lakhs for 20 years, then it would decrease the EMI by about ₹1176 per month. What is more interesting to see and benefits to the borrower is that they can reduce the length of the tenure as well as the Interest savings.
For the home loan borrowers, Pankaj Mathpal The MD and CEO of the Optima money managar also stated that it was in 2025 February and April, this cut was 25 bps and again Reduction to 100 bps in 2025 may help those who delayed buying home to buy home with relief of Rs 3800 to Rs 4000 in the EMI for home loan of ₹ 50 lakhs for 20 years. In short, what can be said is that when there is such phenomena occur, it is certain that home loan buyers pay low interest to the banks. This is a good opportunity or time to take also housing home during this period. As reported in the news it has been reported that there has been a sudden rise in housing loan borrowers after this phenomenon occurred in India.
Highlights of the RBI MPC meet 2025
The announcement by Governor Sanjay Malhotra after the meeting of the RBI’s June monetary policy stated the following.
- Repo rate cut by 50 BPS to 6.5%
- Cash reserve ratio reduced to 100 bps
- For the fiscal year 2026, a reduction in the retail inflation is projected by 30 bps to 3.7%
- For the fiscal year 2026, the projected growth of GDP at 6.5%
- The next RBI MPC meeting will be held from August 4 to 6, 2025.
What is the impact of this on the FD ( fixed deposit)?
This is yet to impact the fixed deposit after the cut. Pankaj Mathpal, the MD and CEO of Optima Money Managers, states that this is going to impact the FD rates negatively, i.e I it may also get lower. Not only to fixed deposits but also to the interest rates of the Bank’s personal savings account holders. He furthermore advised senior citizens and other Fixed deposit investors to open an FD account.
Yes, after this, since February, buyers have been targeting affordable homes. In states like Kolkata, there has been a seen increase in the sales of affordable housing units by property developers since February 2025.
Relating to it, Biplap Kumar, the realtor’s president, also stated that there is the expectation of reviving it, which led to a 1% reduction in the home loan sector since February 2025.
Furthermore, the new decision of the RBI is welcomed, as well as the Developers of Siddha group, Jain group and Shristi infrastructure.
The topics delivered here are based on internet news analysis. We suggest that investors consult with a certified financial expert for any investment-related matters.
What happened to the IDFC bank share price recently?
After the CCI nod to the current Sea investment for the stake acquisition, it has been seen that the IDFC First Bank share price gained 2% in 1 month and 18% more in the last 3 months of 2025. In the last year, it also shows bank shares gained up to 5% and stocks reduced by 7 per cent. However, as per the recent report, the IDFC First Bank share increased by 0.64%.
FAQS
What is the current repo rate of the RBI(Reserve Bank of India)
The current rate of the Reserve Bank of India is 5.5%
In what ways does the RBI control it?
The RBI uses tactics to control it in India in such a way that if the economy of country is down, it lowers the rate to make the borrowers borrow money at reduced interest rates from the bank, while at the same time, if the country’s economy has a growth, then this rate may also be increased.
What can happen if there is a cut in this rate?
If there is a cut in this rate, borrowers of banks, either in home load]n or others, may be required to pay only low interest rates.
Is this a long-term phenomenon?
No, it is a short-term phenomenon.
Give the advantage of this rate cut in India?
In India, if there is a cut in this, it is sure that banks will also cut the interest rates of fixed depositors as well as on the bank savings accounts.
What is the advantage of this rate?
The main advantage of this cut is that it gives a way to control the inflation rate of the country.
Is there any effect of this cut on the home loan borrowers?
Yes, during this rate cut period, the home loan borrower may only need to pay low interest rates on what they borrow from the bank.
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