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 words, 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 repurchase agreement between the buyer and seller (lenders). This type of phenomenon is generally used by the Central or 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 a secured loan as it operateson then 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 for investors, etc. This major cut happened after the RBI MPC meeting was held, and the RBI governor, Shaktikanta Jha Malhotra, declared a 50 bps cut, i.e., to 5.50 per cent. This was higher than expected after the MPC meeting. This also led to a reduction of the central bank cash reserve ratio CRR by 100 bps.
Experts on financial analysis stated this could impact housing loan borrowers and FD ( fixed deposit) Account holders in India. It also mentioned that it could bring relief to 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 beneficial to the borrower, is that they can reduce the length of the tenure as well as the Interest savings.
Foe home loan borrowers, Pankaj Mathpal, thee MD and CEO oOptima Money Manager, also stated that in February and April 2025il, this cut was 25 bps, and again Reduction to 100 bps in 2025 may help those who delayed buying a home to buy home with a a relief of Rs 3800 to Rs 4000 in the EMI for a home loan of ₹ 50 lakhs for 20 years. In short, what can be said is that when such a phenomenon occurs, it is certain that home loan buyers pay low interest to the banks. This is a good opportunity or time to also take a housing loan 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 by 100 bps
- For the fiscal year 2026, a reduction in retail inflation is projected by 30 bps to 3.7%
- For the fiscal year 2026, the projected growth of GDP is 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 has yet to impact fixed dedepositster 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.
In relation to this, Biplap Kumar, the realtor’s president, also stated that there is an 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 tby he 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 that 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%
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 loans or others, may be required to pay only low interest rates.
In what ways does the RBI control it?
The RBI uses tactics to control it in India in such a way that if the country’s economy is down, it lowers the rate to make borrowers borrow money at reduced interest rates from the bank, while at the same time, if the country’s economy is growing, then this rate may also be increased.
Give the advantages 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 rate on fixed deposits as well as on 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.
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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