Updates on RBI Repo Rates: The Reserve Bank of India’s monetary policy committee concluded its bi-monthly review meeting on Friday. Sanjay Malhotra, the governor of the Reserve Bank, made the announcements. The RBI’s move to lower the repo rate by 50 basis points—much more than the market had anticipated—was the most significant of these decisions.

Deductions in Repo Rates: –

For those who already have a loan or are considering one, there is good news. In its monetary policy review, the Reserve Bank of India lowered the repo rate by 50 basis points (RBI Monetary Policy). This exceeds the expectations of the market. The repo rate is now 5.50 percent instead of 6 percent. This was declared by Reserve Bank Governor Sanjay Malhotra.

The policy rate has been lowered for the third time in a row. Since home loan rates are correlated with the repo rate, this directly affects the EMI for home loans. The RBI had already lowered the repo rate by 25–25 basis points in the monetary policy reviews for February and April. In contrast, the repo rate had not decreased for five years before to this. In addition to boosting the sale of homes and vehicles, low lending rates also boost economic growth by boosting liquidity across the board.

CRR also reduced by a huge 100 basis points

Additionally, the RBI lowered the Cash Reserve Ratio (CRR) to 3 percent, a 100 basis point decrease. This rate used to be 4 percent. This is the amount of cash that banks must constantly have on hand. Banks will have more funds available to make loans if this is decreased.

SDF has also been lowered by RBI to 5.25. Additionally, the bank rate was lowered to 5.75 percent. Additionally, this will make it easier for banks to obtain RBI loans.

According to the RBI governor, GDP growth is still adequate and the inflation rate is still below 4%. The choice to lower the rate will boost market consumption, which will boost the economy even more. The RBI has maintained its prediction of 6.5 percent GDP growth for the fiscal year 2025–2026.

According to the RBI, it is also monitoring the scenario resulting from the war on tariffs.

Home loan rates will again come down below 7.5%

Thus far this year, the repo rate has decreased by 100 basis points. This implies that your home loan’s interest rates may likewise decrease by this amount. The house loan rates will drop to 7.5 percent, which is currently around 8 percent, if we add together all three decreases and the banks pass the full reduction on to the consumers. The EMI of a home loan of Rs 30 lakh for 20 years can be reduced by up to Rs 2000 by combining these three reductions.

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