The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) today announced a 25 basis point cut in the repo rate to 6.25%, with the policy stance remaining ‘neutral,’ as stated by RBI Governor Sanjay Malhotra. The committee noted that inflation has declined and is expected to moderate in FY26. Following the announcement, the Indian rupee remained largely unchanged against the U.S. dollar.
Given the significance of this decision for the economy, financial markets, and borrowers, we have gathered expert insights from industry leaders on its potential impact. Here’s what they had to say:
Dr. HP Singh, CMD at Satin Creditcare
The RBI’s decision to revise the repo rate after a long period is a well-calibrated move, keeping in mind current macroeconomic factors. The intent to support growth and financial inclusion has always been there, but given the evolving economic landscape, this adjustment comes at the right time. Lower borrowing costs will increase liquidity, putting more disposable income in the hands of individuals and driving rural demand. This will positively impact small businesses, micro-entrepreneurs, and consumption patterns, creating a ripple effect across the economy. Additionally, the rise in affordable housing demand will further strengthen financial inclusion. With the RBI expected to remain accommodative, this will be particularly beneficial for NBFCs, especially larger, well-diversified, and highly rated players, enabling them to extend credit more effectively. At Satin Creditcare, we see this as an opportunity to deepen financial empowerment, helping individuals and businesses build a more secure and self-sustaining future.
Sundeep Mohindru, Founder & Promoter at M1xchange
The RBI’s decision to cut the repo rate by 25 bps to 6.25% will benefit the MSME sector, which relies on timely and affordable credit to sustain and grow its operations. As an RBI-licensed TReDS platform, we anticipate that this rate cut, along with the supportive measures announced in the Union Budget, will further enhance access to credit for MSMEs by improving liquidity and lowering their borrowing costs. The sustained efforts to strengthen the credit ecosystem will play a pivotal role in driving MSME expansion and India’s overall economic progress.
Ashish Goyal, Co-Founder & CFO at Fibe
The RBI’s decision to cut the repo rate, alongside India’s strong economic growth projections of 6.4% for 2024-25, signals a positive shift toward increased consumption and financial stability. With inflation expected to moderate to 4.8% in 2024-25 and 4.2% in 2025-26, household purchasing power will improve, making borrowing more affordable. This will enable salaried individuals to fulfill their goals—whether it’s owning a home, pursuing higher education, or making important life investments. Lower borrowing costs, coupled with rising disposable income, will drive financial confidence, boost spending, and strengthen India’s economic momentum. Further, the RBI’s move to introduce the exclusive ‘bank.in’ and ‘fin.in’ domains is a crucial step in securing digital financial transactions. A verified domain for regulated financial entities will provide greater transparency and security, ensuring that borrowers can access credit solutions with confidence. This aligns with our commitment to responsible lending and leveraging technology to create a safer, more seamless borrowing experience for young India.
Pallavi Shrivastava, Co-Founder at Progcap
RBI’s decision to cut the policy repo rate by 25 basis points, following a major reduction in personal income tax, underscores the Government’s focus on driving consumerism, stimulating demand, and boosting spending. This first rate cut in five years is expected to benefit both consumers and MSMEs. Increased discretionary spending will have a cascading effect, driving higher revenues and cash flows for MSMEs, particularly in sectors like FMCG, electronics, and automobiles. Additionally, the reduction will lower borrowing costs for MSMEs, making credit more affordable and accessible. We anticipate this move will positively impact overall economic activity, contributing significantly to the rural growth story.
Rishi Anand, MD & CEO at Aadhar Housing Finance Limited
Today's rate cut by 25 basis points after a gap of nearly five years is much in line with our expectations and set to provide an overall support as well as be a catalyst to growth enablers outlined in the recent union budget. The benefits of this rate cut will begin to accrue on an immediate basis and are expected to be fully realized in the next 3 to 6 months, benefiting customers. This step is in the right direction aligning with the sustained central bank assurance of proactive liquidity support and allay concerns of liquidity crunch, thereby accelerating growth.
Ankit Ratan, Co-founder & CEO at Signzy
Today's RBI MPC meeting highlights the new governor, Mr. Sanjay Malhotra's, fresh focus on strengthening India's financial ecosystem. While the digital payment ecosystem in India has been growing rapidly, so have fraud cases; the RBI’s H1FY25 report highlighted a 27% rise in digital fraud cases in 2024. The RBI has been consistent in enhancing digital trust in the financial sector, and now, with the renewed vigorous approach of the RBI’s new governor, the industry will be further encouraged to conduct business in a compliant, secure, and sustainable manner. The launch of a special internet domain, bank.in, is a significant step by the RBI to reduce cybersecurity threats and malicious activities, though clear instructions on the domain are awaited. However, this initiative will empower banks to streamline and secure their financial services, enhancing digital trust in the industry. Furthermore, the RBI plans to launch an exclusive domain for non-banking entities – fin.in, showcasing the RBI’s approach to providing a robust and secure financial ecosystem to the consumer.
Samir Bhandari, Co-founder, CFO at hBits
The RBI’s decision to cut the repo rate by 25 bps to 6.25 % for the first time in 5 years underscores its commitment to financial stability while balancing inflation and growth. This is particularly significant for commercial real estate investors, as it ensures access to capital at predictable costs, allowing for long-term strategic investments in premium assets. With inflationary pressures moderating and liquidity remaining steady, investor confidence in structured real estate investments, including fractional ownership, is expected to strengthen. At hBits, we see this as a positive shift, as more institutional and retail investors look for stable, inflation-hedged assets with strong rental yields. Given the global economic uncertainties, commercial real estate remains a resilient and income-generating asset class, and the RBI’s policy direction will play a key role in shaping future investment trends in this space.
Viram Shah, Founder & CEO at Vested Finance
RBI decision to cut rates is in line with expectations. The dovish stance follows most global major central banks that have also cut rates or have shown an indication to do so. The rate cut will likely further narrow the US-India bond yield spread that is already at 20-year low, making the US bonds more attractive for foreign investors. This may lead to more outflows in coming months leading to investments into US bonds and stock markets. A weak rupee also makes a case for investing in US markets as investors will benefit from a strong dollar. At the time the Indian market has been struggling, investors should consider investing in global equities, especially US-listed, as they may not just provide alpha but also help diversify their portfolio. Domestic focused stocks in the US, such as utilities, steelmakers, etc. look attractive.
Sahil Lakshmanan, Chief Business Officer at CarePal Money
The RBI’s decision to cut the repo rate to 6.25% is a strategic move to stimulate economic growth while inflation remains under control. With the MPC noting that inflation is expected to moderate in FY26, this rate cut signals confidence in price stability, giving room for policy easing. For borrowers, lower EMIs on loans could improve affordability and boost consumption. However, the market response has been measured so far, with the Indian rupee remaining largely unchanged against the U.S. dollar. This suggests that global factors and liquidity conditions will play a crucial role in determining the long-term impact of this decision. With the policy stance remaining ‘neutral,’ the RBI is maintaining flexibility, indicating that future rate actions will depend on economic data. The key focus now will be on how effectively banks transmit this cut and whether it translates into stronger credit demand and sustained economic momentum.
Ankur Maheshwari, CFO at Freo
The RBI’s decision to reduce the repo rate to 6.25% is a welcome move, especially as it’s the first cut post-pandemic. This decision has far-reaching benefits—lower borrowing costs will encourage more individuals to invest in homes, particularly those who were previously on the fence due to rising construction costs. Additionally, with tax relief measures announced in Budget 2025, people will have more disposable income, making access to credit easier. While borrowing becomes more affordable, attractive fixed deposit rates will continue to ensure that savers have secure and rewarding investment options. As a fintech, we see this as a balanced move that supports both borrowers and savers, fostering overall financial growth.
Avinash Rao, Founder at Alt DRX
The RBI governor’s latest announcement on Rate Cuts should be seen in conjunction with the FM’s announcement on changes in the IT Act and rationalization of Tax Slabs. Both these steps will act as catalysts, fuelling economic growth & optimism in the economy. Such steps augur well not just for demands for New Homes but also help in building a sense of optimism & positivity in the larger population. I am quite positive that this is the first of many similar steps that the government will be taking to provide the necessary growth impetus required to build Viksit Bharat.
Yashwant Lodha, Co-founder at PayNearby
India is making rapid strides towards becoming a digital payments powerhouse and with this, the RBI’s focused measures to strengthen digital security and enhance user protection are timely and essential. The introduction of an exclusive ‘fin.in’ domain for financial institutions and the extension of Additional Factor Authentication (AFA) to international digital payments with ‘bank.in’ domain are critical steps toward securing the digital ecosystem. With frauds becoming more sophisticated, a proactive approach to digital security will help build greater trust in digital financial services. At PayNearby, we remain committed to enabling safe and seamless transactions for Bharat, ensuring that every citizen, even at the last mile, can confidently embrace digital payments.
Prashant Mishra founder & CEO at Agnam Advisors
The Reserve Bank of India (RBI) decided to cut the repo rate by 25 basis points, reducing it from 6.50% to 6.25%. This decision was taken unanimously by the Monetary Policy Committee (MPC) and marks the first rate cut in five years. In his first MPC meeting as RBI Governor, Sanjay Malhotra maintained a “neutral” policy stance, indicating a balanced approach as the central bank navigates through current economic challenges.
This rate cut is expected to make borrowing cheaper for banks, which in turn can pass on lower interest rates to consumers and businesses. With lower borrowing costs, loans such as home and business loans may become more affordable, encouraging spending and investment. This move is seen as a positive step to stimulate economic activity and support businesses during a period when growth has been slowing down.
At the same time, the RBI is keeping a close eye on inflation. Despite the easing in rates, the central bank forecasts inflation to remain controlled at around 4.2% for FY26. The “neutral” stance highlights the RBI’s careful balancing act: while lowering rates can boost economic growth, it also carries the risk of rising inflation. By keeping inflation projections in check, the RBI aims to ensure that the benefits of cheaper credit do not lead to a surge in prices.
Overall, the rate cut reflects the RBI’s efforts to address several challenges at once, including falling growth, tighter liquidity conditions, a depreciating rupee, and heightened geopolitical uncertainties. The decision is a strategic measure to support the economy by making loans more accessible while maintaining a focus on keeping inflation under control.
Amit Suri, Director & CEO at AUM Wealth P Ltd.
The RBI’s decision to cut the repo rate by 25 basis points is a positive step toward reviving economic growth. With inflation moderating and liquidity conditions being addressed, this move should make borrowing more affordable for businesses and consumers alike. Lower EMIs on loans will boost disposable income, encouraging spending and investment, which in turn will support overall economic activity.
However, what is to be seen is when and how much the banks transfer the rate cut to the borrower’s benefit. The effectiveness of this decision depends on the extent to which financial institutions pass on the reduced rates, making credit truly accessible and impactful. With the market expecting another rate cut in the coming months, we anticipate further momentum in easing borrowing costs.
While growth projections have been revised downward, the rate cut signals the central bank’s commitment to balancing inflation control with economic momentum. The market now anticipates further easing in the coming months, with another rate cut potentially on the horizon. If inflation remains under control and economic headwinds persist, we could see additional monetary policy adjustments to sustain recovery. This rate cut, along with supportive liquidity measures, should help boost consumption, drive business expansion, and enhance market sentiment.
Yogita Dand, Certified Financial Planner
The recent rate cut is poised to act as a strong catalyst for economic growth by making borrowing more affordable for both businesses and consumers. Lower interest rates will reduce the cost of capital, encouraging companies to expand operations, invest in infrastructure, and create jobs. On the consumer front, reduced EMIs on home loans, auto loans, and personal loans will ease financial burdens, increasing disposable income and stimulating spending—further fueling economic demand.
Despite the easing of interest rates, the economy is expected to remain resilient, driven by higher productivity, innovation, and improved business sentiment. This move not only strengthens financial flexibility but also paves the way for sustained, long-term growth.
Govind Sankaranarayanan, Co-founder & COO at Ecofy
"With the repo rate now set to 6.25%, this move by the RBI is expected to significantly benefit the banking and NBFC sector by reducing the overall cost of funds and improving liquidity. Reduced borrowing costs will help banks and NBFCs to provide affordable funding and thus extend credit, especially in the SME segments, boosting loan demand and economic activity".
“This will relieve some pressure from non-banking financial institution funding costs and, as a result, offer more attractive lending rates. This would also spur credit growth in auto, SME, and consumer loans. Also, better liquidity will help strengthen balance sheets of non-banking financial institutions so that they can hasten loan disbursals furthering economic growth. The RBI decision will thus give both banks and NBFCs the impetus to shape up their lending strategy and, with this, encourage enhanced credit growth and financial inclusion," he added.
