The RBI is weighing whether to let lenders remotely disable smartphones bought on EMI if borrowers default.
That has sparked a debate over consumer rights, privacy and the risks of aggressive lending.


 Could Your Phone Be Locked If You Miss EMI?

Can banks and lenders remotely lock a mobile phone that was purchased on EMIs if the borrower stops paying? That’s the debate the Reserve Bank of India (RBI) is now weighing.


Should lenders be allowed to 'kill' financed phones if EMIs aren't paid?

 India’s economy is showing strong signs of resilience, even as global uncertainties and new US Tariffs create headwinds. The Reserve Bank of India’s September bulletin highlights a five quarter high gdp growth, stable exports, and robust domestic demand. Let’s look at what’s driving india’s growth and the risks ahead in this report...

 RBI Sees Strong Domestic Drivers Amid Global Uncertainty

The Reserve Bank of India (RBI) is taking a cautious stance in the face of escalating global uncertainty. Minutes from the latest Monetary Policy Committee meeting reveal that the central bank paused its rate decisions earlier this month to assess the potential fallout from Donald Trump’s proposed 50% tariffs on Indian goods.

As global trade tensions flare ahead of the 2026 U.S. elections, India finds itself in the crosshairs of economic nationalism. The RBI is now balancing domestic inflation control with potential external shocks, especially in sectors highly dependent on exports to the U.S.


RBI meeting minutes: Rates on hold to check tariffs impact

The Reserve Bank of India has made it easier for foreign banks to put their extra rupees to work. These rupees sit in something called a special rupee vostro account, a type of account held by an indian bank on behalf of a foreign bank. Now, the RBI says the extra money in these accounts can be freely invested in indian government bonds, removing earlier limits on short term investments. 

RBI Allows Foreign Rupee Balances In Government Bonds

The Indian economy is “doing very well” and contributing more to global growth than the US, Reserve Bank Governor Sanjay Malhotra said on Wednesday, days after US President Donald Trump’s remark of India being a dead economy.The country is expected to grow 6.5 per cent, as against the International Monetary Fund’s (IMF’s) estimate of about 3 per cent global growth in 2025, Malhotra told reporters at the central bank headquarters here.“We are contributing about 18 per cent, which is more than the US where the contribution is expected to be much less — about 11 per cent or something. We are doing very well and we will continue to improve further,” Malhotra said, replying to a question on Trump’s recent comments.Malhotra said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past.Amid the trade policy negotiations, Trump had called India as a “dead economy” while expressing disappointment with New Delhi’s posturing to continue buying cheap oil from Russia.“I don’t care what India does with Russia. They can take their dead economies down together,” Trump had reportedly said.This statement and the ones following that were as sharp a critique, while having the potential to destabilise the India-US relationship, have also led to concerns over exact tariffs and penalties for buying Russian oil that await India from the Trump administration.Malhotra said the RBI does not expect any impact on inflation because of the tariff-related aspects, while Deputy Governor Poonam Gupta elaborated that there will not be any first order impact of the geopolitical issues on the domestic inflation.Even in the event of India being forced to shift away from Russian oil because of US concerns, there will not be any impact on domestic inflation, Malhotra said.He said this fiscal year, authorities will step in to ensure that the purchase prices of petroleum prices do not pinch the common man, hinting of a possible cut in duties if the oil becomes dearer.

The RBI governor said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past.

The Indian economy is “doing very well” and contributing more to global growth than the US, Reserve Bank Governor Sanjay Malhotra said on Wednesday, days after US President Donald Trump’s remark of India being a dead economy. The country is expected to grow 6.5 per cent, as against the International Monetary Fund’s (IMF’s) estimate of about 3 per cent global growth in 2025, Malhotra told reporters at the central bank headquarters here. “We are contributing about 18 per cent, which is more than the US where the contribution is expected to be much less — about 11 per cent or something. We are doing very well and we will continue to improve further,” Malhotra said, replying to a question on Trump’s recent comments. Malhotra said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past. Amid the trade policy negotiations, Trump had called India as a “dead economy” while expressing disappointment with New Delhi’s posturing to continue buying cheap oil from Russia. “I don’t care what India does with Russia. They can take their dead economies down together,” Trump had reportedly said. This statement and the ones following that were as sharp a critique, while having the potential to destabilise the India-US relationship, have also led to concerns over exact tariffs and penalties for buying Russian oil that await India from the Trump administration. Malhotra said the RBI does not expect any impact on inflation because of the tariff-related aspects, while Deputy Governor Poonam Gupta elaborated that there will not be any first order impact of the geopolitical issues on the domestic inflation. Even in the event of India being forced to shift away from Russian oil because of US concerns, there will not be any impact on domestic inflation, Malhotra said. He said this fiscal year, authorities will step in to ensure that the purchase prices of petroleum prices do not pinch the common man, hinting of a possible cut in duties if the oil becomes dearer.

The RBI governor said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past.

RBI governor reacts to Trump's 'dead economy' remark - Here's how he defended India

India’s central bank is stepping in to calm rising short-term borrowing costs. On Wednesday, the Reserve Bank of India (RBI) announced a ₹500 billion ($5.8 billion) liquidity injection into the banking system via a two-day repurchase (repo) auction, after money market rates unexpectedly spiked above the central bank’s policy benchmark.&nbsp;The move comes after the weighted average call rate, a key interbank borrowing rate that the RBI closely watches, surged to 5.79 per cent, overtaking the RBI’s repo rate of 5.5 per cent. According to Bloomberg, this marks the first time since March that overnight funding costs have breached the RBI’s policy rate, a development that raises fresh questions about liquidity management and monetary transmission. In a statement, the RBI cited “current and evolving liquidity conditions” as the reason for the cash injection.<h2>Why borrowing costs spiked</h2>The sudden rise in borrowing costs is being linked to monthly tax outflows, particularly GST payments, which pulled large sums out of the banking system. At the same time, aggressive participation by banks in the RBI’s variable rate reverse repo (VRRR) operations, where the central bank absorbs excess liquidity appears to have backfired.&nbsp;“It seems that banks tendered very aggressively at the last variable rate reverse repurchase operation and once the GST outflows hit the system, they were left with a situation they did not envisage,” said Abhishek Upadhyay, economist at ICICI Securities Primary Dealership Ltd., as quoted by Bloomberg. This mismatch between inflows and outflows highlights the challenge of managing liquidity in a fast-digitising economy where funds move 24/7.<h2>What’s behind the volatility?</h2>While liquidity fluctuations are not new, the RBI is under increasing pressure to stabilise funding rates, especially when they deviate from the policy rate, a critical anchor for borrowing costs across the economy. According to DBS Bank Ltd., nearly ₹2 trillion ($24 billion) is currently locked in a seven-day VRRR with the RBI, draining liquidity from the system.&nbsp;Surplus liquidity, the excess cash parked by banks with the RBI, dropped to ₹2.2 trillion ($26 billion) as of July 22, down sharply from ₹3.9 trillion just a few days earlier, according to Bloomberg Economics estimates. Bond traders are now seeking greater clarity from the RBI on how much surplus liquidity it considers “ideal” following its recent liquidity-draining actions, Bloomberg News reported, citing sources familiar with the matter.<h2>More auctions ahead, but with caution</h2>The RBI is widely expected to continue with its variable rate reverse repo auctions, albeit with smaller amounts, as the market digests recent volatility. “The RBI will likely continue to offer the VRRR auction, though likely reduce the size,” said Nathan Sribalasundaram, rates strategist at Nomura Holdings Inc. “Banks are likely to be a little more cautious this time around.”&nbsp;The RBI’s next monetary policy meeting is scheduled for August 6, and money market participants will be watching closely for signs of how the central bank plans to recalibrate its liquidity framework. According to RBI Governor Shaktikanta Das, a detailed report on this new liquidity model is expected by end-July.&nbsp;For now, the central bank’s latest action serves as a reminder of the delicate balance it must strike keeping short-term funding markets stable without undermining its broader inflation and monetary policy goals.&nbsp;(With inputs from the agencies)

This spike is attributed to monthly tax outflows, especially GST payments, and aggressive bank participation in RBI variable rate reverse repo operations, leading to a liquidity mismatch.

India’s central bank is stepping in to calm rising short-term borrowing costs. On Wednesday, the Reserve Bank of India (RBI) announced a ₹500 billion ($5.8 billion) liquidity injection into the banking system via a two-day repurchase (repo) auction, after money market rates unexpectedly spiked above the central bank’s policy benchmark. The move comes after the weighted average call rate, a key interbank borrowing rate that the RBI closely watches, surged to 5.79 per cent, overtaking the RBI’s repo rate of 5.5 per cent. According to Bloomberg, this marks the first time since March that overnight funding costs have breached the RBI’s policy rate, a development that raises fresh questions about liquidity management and monetary transmission. In a statement, the RBI cited “current and evolving liquidity conditions” as the reason for the cash injection. Why borrowing costs spiked The sudden rise in borrowing costs is being linked to monthly tax outflows, particularly GST payments, which pulled large sums out of the banking system. At the same time, aggressive participation by banks in the RBI’s variable rate reverse repo (VRRR) operations, where the central bank absorbs excess liquidity appears to have backfired. “It seems that banks tendered very aggressively at the last variable rate reverse repurchase operation and once the GST outflows hit the system, they were left with a situation they did not envisage,” said Abhishek Upadhyay, economist at ICICI Securities Primary Dealership Ltd., as quoted by Bloomberg. This mismatch between inflows and outflows highlights the challenge of managing liquidity in a fast-digitising economy where funds move 24/7. What’s behind the volatility? While liquidity fluctuations are not new, the RBI is under increasing pressure to stabilise funding rates, especially when they deviate from the policy rate, a critical anchor for borrowing costs across the economy. According to DBS Bank Ltd., nearly ₹2 trillion ($24 billion) is currently locked in a seven-day VRRR with the RBI, draining liquidity from the system. Surplus liquidity, the excess cash parked by banks with the RBI, dropped to ₹2.2 trillion ($26 billion) as of July 22, down sharply from ₹3.9 trillion just a few days earlier, according to Bloomberg Economics estimates. Bond traders are now seeking greater clarity from the RBI on how much surplus liquidity it considers “ideal” following its recent liquidity-draining actions, Bloomberg News reported, citing sources familiar with the matter. More auctions ahead, but with caution The RBI is widely expected to continue with its variable rate reverse repo auctions, albeit with smaller amounts, as the market digests recent volatility. “The RBI will likely continue to offer the VRRR auction, though likely reduce the size,” said Nathan Sribalasundaram, rates strategist at Nomura Holdings Inc. “Banks are likely to be a little more cautious this time around.” The RBI’s next monetary policy meeting is scheduled for August 6, and money market participants will be watching closely for signs of how the central bank plans to recalibrate its liquidity framework. According to RBI Governor Shaktikanta Das, a detailed report on this new liquidity model is expected by end-July. For now, the central bank’s latest action serves as a reminder of the delicate balance it must strike keeping short-term funding markets stable without undermining its broader inflation and monetary policy goals. (With inputs from the agencies)

India's Reserve Bank (RBI) injected ₹500 billion ($5.8 billion) into the banking system via a two-day repo auction to address rising short-term borrowing costs, as the weighted average call rate surged to 5.79%, surpassing the RBI's repo rate of 5.5%.

RBI steps in with cash boost as borrowing costs surge

India’s retail inflation cooled sharply to 2.10 per cent in June, marking its lowest level in over six years and slipping close to the bottom end of the Reserve Bank of India’s target band. The dramatic slowdown has been driven largely by easing food prices, offering the central bank more headroom to support growth through monetary easing. According to Reuters, June’s inflation prints surprised markets, coming in lower than the 2.5 per cent median estimate in a Reuters poll. It also marked a steep decline from 2.82 per cent in May.<h2>Food prices lead the disinflation trend</h2>Food prices, which make up nearly half of India’s consumer price index basket, saw a year-on-year decline of 1.06 per cent in June. This compared with a 0.99 per cent rise in May, signalling broad-based relief for consumers. Vegetable prices plunged 19 per cent year-on-year in June, extending May’s 13.7 per cent fall.&nbsp;Sakshi Gupta, economist at HDFC Bank, told Reuters that, “CPI inflation edged further down in June on the back of lower food prices". The government’s statistical office confirmed that both headline and food inflation in June were the lowest since January 2019.<h2>Easing inflation gives RBI room to focus on growth</h2>The latest inflation data underscores the impact of favourable monsoon rains, which have boosted crop production and moderated food prices. The Reserve Bank of India (RBI) is mandated to keep inflation within a 2–6 per cent band for three consecutive quarters. With inflation now hovering at the bottom end of that range, economists say the central bank has room to continue cutting rates if needed. In June, the RBI surprised markets by cutting its repo rate by 50 basis points, a larger-than-expected move that signalled a shift toward supporting economic growth.&nbsp;The central bank also lowered its fiscal 2026 retail inflation forecast to 3.7 per cent from 4 per cent, citing the early arrival of monsoon rains and strong harvest expectations. Sanjay Malhotra, RBI governor, told a national daily that if inflation undershoots the central bank’s projections, it could create further space for policy easing.<h2>Economists see scope for more cuts, but caution remains</h2>While the latest inflation data has boosted hopes for further monetary easing, some economists caution that the RBI will likely take a measured approach.&nbsp;Upasna Bhardwaj, economist at Kotak Mahindra Bank, told Reuters that, “While comfortable inflation opens room for further monetary easing, we expect the RBI to maintain a pause in the coming one-two meetings and remain watchful of the transmission ahead along with global uncertainties.”&nbsp;Core inflation, an important gauge of underlying demand that excludes volatile food and energy prices was estimated at 4.4–4.5 per cent in June, up from 4.17–4.20 per cent in May, according to economists quoted by Reuters. India’s official statistics agency does not publish core inflation figures, but analysts track them closely to assess the persistence of price pressures beyond food and fuel.The bottom line&nbsp;June’s inflation reading offers a rare piece of good news for India’s policymakers, signalling that the central bank has regained room to manoeuvre after a year of battling price pressures.But with core inflation still elevated and global risks looming, the RBI is expected to tread carefully, balancing the need to support growth with its commitment to price stability.&nbsp;

However, with core inflation still hovering above 4.4% and global uncertainties in play, economists expect the RBI to proceed with caution, maintaining a data driven approach in future policy decisions.

India’s retail inflation cooled sharply to 2.10 per cent in June, marking its lowest level in over six years and slipping close to the bottom end of the Reserve Bank of India’s target band. The dramatic slowdown has been driven largely by easing food prices, offering the central bank more headroom to support growth through monetary easing. According to Reuters, June’s inflation prints surprised markets, coming in lower than the 2.5 per cent median estimate in a Reuters poll. It also marked a steep decline from 2.82 per cent in May. Food prices lead the disinflation trend Food prices, which make up nearly half of India’s consumer price index basket, saw a year-on-year decline of 1.06 per cent in June. This compared with a 0.99 per cent rise in May, signalling broad-based relief for consumers. Vegetable prices plunged 19 per cent year-on-year in June, extending May’s 13.7 per cent fall. Sakshi Gupta, economist at HDFC Bank, told Reuters that, “CPI inflation edged further down in June on the back of lower food prices". The government’s statistical office confirmed that both headline and food inflation in June were the lowest since January 2019. Easing inflation gives RBI room to focus on growth The latest inflation data underscores the impact of favourable monsoon rains, which have boosted crop production and moderated food prices. The Reserve Bank of India (RBI) is mandated to keep inflation within a 2–6 per cent band for three consecutive quarters. With inflation now hovering at the bottom end of that range, economists say the central bank has room to continue cutting rates if needed. In June, the RBI surprised markets by cutting its repo rate by 50 basis points, a larger-than-expected move that signalled a shift toward supporting economic growth. The central bank also lowered its fiscal 2026 retail inflation forecast to 3.7 per cent from 4 per cent, citing the early arrival of monsoon rains and strong harvest expectations. Sanjay Malhotra, RBI governor, told a national daily that if inflation undershoots the central bank’s projections, it could create further space for policy easing. Economists see scope for more cuts, but caution remains While the latest inflation data has boosted hopes for further monetary easing, some economists caution that the RBI will likely take a measured approach. Upasna Bhardwaj, economist at Kotak Mahindra Bank, told Reuters that, “While comfortable inflation opens room for further monetary easing, we expect the RBI to maintain a pause in the coming one-two meetings and remain watchful of the transmission ahead along with global uncertainties.” Core inflation, an important gauge of underlying demand that excludes volatile food and energy prices was estimated at 4.4–4.5 per cent in June, up from 4.17–4.20 per cent in May, according to economists quoted by Reuters. India’s official statistics agency does not publish core inflation figures, but analysts track them closely to assess the persistence of price pressures beyond food and fuel. The bottom line June’s inflation reading offers a rare piece of good news for India’s policymakers, signalling that the central bank has regained room to manoeuvre after a year of battling price pressures. But with core inflation still elevated and global risks looming, the RBI is expected to tread carefully, balancing the need to support growth with its commitment to price stability.

India’s inflation dropped to a six-year low of 2.10% in June, led by falling food prices. The RBI now has room for further easing, but core inflation and global risks could limit bold moves.

India’s retail inflation hits six-year low at 2.1% on falling food prices

India’s central bank is stepping up efforts to manage the banking system’s surplus cash. On Tuesday, the Reserve Bank of India (RBI) announced that it will conduct a two-day variable rate reverse repo (VRRR) auction worth ₹1 trillion ($11.67 billion) on July 9, aiming to keep short-term interest rates aligned with policy targets.&nbsp;This is the RBI’s second such operation in just a week. A similar seven-day reverse repo auction for ₹1 trillion was held on July 4. The decision, as reported by Reuters, comes amid a surge in liquidity that has kept interbank lending rates well below the central bank’s benchmark repo rate.<h2>Why is RBI absorbing liquidity?</h2>According to Reuters, liquidity in the banking system stood at a surplus of ₹3.4 trillion as of Monday. That’s a large cushion for lenders, but one that risks pushing short-term interest rates too low.&nbsp;The RBI uses reverse repo auctions to temporarily withdraw excess funds from banks. It’s part of its toolkit to steer overnight rates, like the Weighted Average Call Rate (WACR), closer to the repo rate of 5.50 per cent.&nbsp;Currently, the WACR is hovering around 5.26 per cent, near the floor set by the Standing Deposit Facility (SDF) at 5.25 per cent, and well below the repo. The Treps rate, another overnight benchmark, has also dropped to 5.13 per cent.<h2>What’s behind the liquidity glut?</h2>Analysts cited by Reuters say the liquidity overhang is mainly due to higher government spending and lower-than-expected GST collections. This unusual combination has eased the typical mid-year cash crunch.&nbsp;Adding to the liquidity flood was last month’s 100 basis point cut in the Cash Reserve Ratio (CRR), which freed up about ₹2.5 trillion into the system. That left the RBI with fewer tools for absorbing liquidity, except operations like VRRR.<h2>Strong demand expected from banks</h2>The RBI’s last VRRR auction saw bids totalling ₹1.7 trillion, though the central bank accepted only ₹1 trillion at a cut-off rate of 5.47 per cent. Market participants told Reuters they expect similarly strong demand in Wednesday’s two-day operation, which will mature on Friday.&nbsp;Reverse repo auctions like these help the RBI fine-tune the money supply without needing to alter the broader policy stance.<h2>Policy backdrop: Cut, pause, absorb</h2>The RBI cut its policy rate by a surprise 50 basis points last month and shifted its stance to “neutral”. Alongside this, it halted liquidity infusions and resumed absorption operations from June 27, after interbank rates dipped below its intended range.Analysts quoted by Reuters say the RBI is likely to continue using reverse repo tools to maintain control over short-term rates and ensure smooth policy transmission, especially as inflation pressures remain manageable.&nbsp;As the RBI balances liquidity and interest rate management, Wednesday’s auction will offer a key signal of how India’s banking system and its policy path, are adjusting to the new surplus environment.&nbsp;

Facing a ₹3.4 trillion liquidity surplus and soft interbank rates, the RBI launches back to back reverse repo operations, signaling tighter short-term control amid a neutral policy stance and manageable inflation.

India’s central bank is stepping up efforts to manage the banking system’s surplus cash. On Tuesday, the Reserve Bank of India (RBI) announced that it will conduct a two-day variable rate reverse repo (VRRR) auction worth ₹1 trillion ($11.67 billion) on July 9, aiming to keep short-term interest rates aligned with policy targets. This is the RBI’s second such operation in just a week. A similar seven-day reverse repo auction for ₹1 trillion was held on July 4. The decision, as reported by Reuters, comes amid a surge in liquidity that has kept interbank lending rates well below the central bank’s benchmark repo rate. Why is RBI absorbing liquidity? According to Reuters, liquidity in the banking system stood at a surplus of ₹3.4 trillion as of Monday. That’s a large cushion for lenders, but one that risks pushing short-term interest rates too low. The RBI uses reverse repo auctions to temporarily withdraw excess funds from banks. It’s part of its toolkit to steer overnight rates, like the Weighted Average Call Rate (WACR), closer to the repo rate of 5.50 per cent. Currently, the WACR is hovering around 5.26 per cent, near the floor set by the Standing Deposit Facility (SDF) at 5.25 per cent, and well below the repo. The Treps rate, another overnight benchmark, has also dropped to 5.13 per cent. What’s behind the liquidity glut? Analysts cited by Reuters say the liquidity overhang is mainly due to higher government spending and lower-than-expected GST collections. This unusual combination has eased the typical mid-year cash crunch. Adding to the liquidity flood was last month’s 100 basis point cut in the Cash Reserve Ratio (CRR), which freed up about ₹2.5 trillion into the system. That left the RBI with fewer tools for absorbing liquidity, except operations like VRRR. Strong demand expected from banks The RBI’s last VRRR auction saw bids totalling ₹1.7 trillion, though the central bank accepted only ₹1 trillion at a cut-off rate of 5.47 per cent. Market participants told Reuters they expect similarly strong demand in Wednesday’s two-day operation, which will mature on Friday. Reverse repo auctions like these help the RBI fine-tune the money supply without needing to alter the broader policy stance. Policy backdrop: Cut, pause, absorb The RBI cut its policy rate by a surprise 50 basis points last month and shifted its stance to “neutral”. Alongside this, it halted liquidity infusions and resumed absorption operations from June 27, after interbank rates dipped below its intended range. Analysts quoted by Reuters say the RBI is likely to continue using reverse repo tools to maintain control over short-term rates and ensure smooth policy transmission, especially as inflation pressures remain manageable. As the RBI balances liquidity and interest rate management, Wednesday’s auction will offer a key signal of how India’s banking system and its policy path, are adjusting to the new surplus environment.

RBI ramps up liquidity absorption with ₹1 trillion VRRR auction to keep short-term rates aligned with policy goals.

RBI steps in with ₹1 lakh crore reverse repo auction to curb excess liquidity

In a surprise move, the Reserve Bank of India slashed the repo rate by 50 basis points to 5.5 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points in a staggered manner.&nbsp;&nbsp;The central bank also shifted its policy stance from 'accommodative' to 'neutral'.&nbsp;Here's what economists, strategists, and leaders from the banking and finance industry had to say:&nbsp;"RBI’s bold move: what next after it cuts by 50bp?": Deepali Bhargava, Regional Head of Research, Asia-Pacific, ING "The RBI cut policy rates by more than expected and changed its policy stance from accommodative to neutral. We think that with this move, the RBI is signalling a near-term pause, while leaving the door open for more easing if growth or inflation weakens further. We continue to expect another 25bp rate cut in the fourth quarter of this year."&nbsp;"Neutral stance suggests fewer rate cuts ahead": Jeff Ng, Head of Asia Macro Strategy, Sumitomo Mitsui Banking Corporation "RBI may have decided to move quickly to a more appropriate policy rate level after recent headwinds and low inflation prints. A shift toward neutral stance means more rate cuts may be unlikely in the near-term."&nbsp;"MPC delivered major surprises with repo, CRR cuts": Siddhartha Sanyal, Chief Economist &amp; Head of Research at Bandhan Bank"Today’s monetary policy committee (MPC) meeting sprang several major surprises. The 50-basis point repo rate cut came in as a surprise against consensus and our expectation of a 25bp rate cut. However, given the change in stance of monetary policy from “accommodative” to “neutral” and the RBI’s communication of very little space for more support from monetary policy, our expectation of a terminal repo rate of 5.50% in the current cycle remains largely unchanged.&nbsp;The larger than expected rate cut, coupled with announcement of a large CRR cut around the beginning of the busy season, brings in more focus on transmission of the monetary policy actions into the real economy. Today’s announcement will not only push banks’ external benchmark linked lending rates lower, but will also lower MCLR and deposit rates, thereby, bringing in greater pace and intensity to transmission."&nbsp;"Action-packed policy, out-of-the-box thinking": C.S. Setty, Chairman at SBI &amp; Chairman at IBA"A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.&nbsp;The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty."&nbsp;“Very dovish policy, capex boost expected”: Sagar Shah, Head – Domestic Markets, RBL Bank "Very dovish policy frontloading the Repo cut and liquidity infusion. Reduced cost of capital will lay groundwork for capex with a lag of 2 quarters. CRR cut along with Repo cut should lead to transmission faster."&nbsp;"RBI wants banks to act fast": Venkatakrishnan Srinivasan, Managing Partner, Rockfort Fincap"The RBI has front-loaded everything and wants banks to react now. By changing the stance, I think they are trying to indicate no immediate rate cuts."&nbsp;"Transmission now rests with banks": Madhavi Arora, Economist, Emkay Global Financial Services Ltd. "The ball is in the banks’ court to transmit easier financial conditions faster."&nbsp;"RBI’s intent is growth support amid uncertainty": Amit Bivalkar, Founder Director, Sapient Finserv"The RBI’s decision to cut the repo rate by a sharper-than-expected 50 basis points to 5.5% reflects its strong intent to support economic growth amid rising global uncertainties and weak domestic demand. The cumulative 100 bps cut since February 2025, along with the phased 1% CRR reduction, will ease borrowing costs and improve liquidity in the system, potentially boosting credit flow. However, with the shift in stance from ‘accommodative’ to ‘neutral’, the central bank has signaled a pause, choosing to closely monitor inflation trends and global developments before taking further action."&nbsp;"CRR cut to release ₹2.5 lakh crore liquidity": Dr. Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings Ltd. "The RBI’s Monetary Policy Committee (MPC) exceeded expectations by slashing the Repo rate by 50 basis points. Further, the cash reserve ratio (CRR) was reduced by 100 basis points from 4% to 3% in a staggered manner, implemented in four equal tranches of 25 basis points each, in the fortnights beginning September 6, October 4, November 1, and November 29 to provide durable liquidity. The cut in CRR is expected to release primary liquidity of about Rs 2.5 lakh crore to the banking system by the end of November 2025.&nbsp;The RBI changed its stance from ‘accommodative’ to ‘neutral.’ The outlook for food inflation is soft, and the core inflation outlook remains benign. Given the benign inflation, the inflation forecast for the year has been revised downward from 4% to 3.7%. The FY26 GDP growth forecast is maintained at 6.5 %. The risks are evenly balanced."&nbsp;"Rate cuts will spur lending, jobs, and growth": Dharan Shah, Founder, Tradonomy.AI "The RBI's decisive 50 bps repo rate cut to 5.5% and a 100 bps CRR reduction over four quarters unleash a powerful boost for India’s economy. By lowering borrowing costs and freeing up bank liquidity, sectors like real estate, automobiles, and consumer durables are set to thrive. With CPI inflation at 3.7% and FY26 GDP growth projected at 6.5%, fueled by steady rural demand and rising urban consumption, the USDINR forward rate at ~86.72 signals stability. This dual policy move will likely spur lending, investment, and job creation, despite global uncertainties. Now the RBI stance being neutral, all future RBI events for the next few quarters will be non-events."&nbsp;"Complex messaging: easing now, caution ahead": Sandeep Bagla, CEO, TRUST Mutual Fund"MPC frontloaded the rate cuts, reducing repo rates by 50 bps and also cut CRR by 100 bps. These measures came as a positive surprise to equity markets as there will be greater impetus to growth and there could be faster pick up in the interest rate sectors. Oddly, RBI also changed its stance from accommodative to neutral, thereby signaling that further softening of monetary conditions may not be easily forthcoming. Bond markets experienced some steepening with shorter end of the yield curve seeing some softening. It is complex messaging from RBI where they have eased the policy rates and liquidity but made no promises for the future."&nbsp;"Rate cuts support markets and rupee": Amit Pabari, MD, CR Forex "The Reserve Bank of India has delivered a sharper-than-expected policy easing, cutting the repo rate by 50 basis points to 5.5% and slashing the Cash Reserve Ratio by 100 basis points to 3%. These aggressive rate cuts are providing strong support to Indian equity markets, while the CRR reduction is expected to inject approximately ₹2.5 lakh crore of liquidity into the banking system.In addition, the RBI has shifted its policy stance from 'accommodative' to 'neutral', signalling that interest rates are likely to remain stable in the near term, which is supporting the rupee and limiting any further depreciation."&nbsp;

The central bank also shifted its policy stance from accommodative to neutral. 

In a surprise move, the Reserve Bank of India slashed the repo rate by 50 basis points to 5.5 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points in a staggered manner. The central bank also shifted its policy stance from 'accommodative' to 'neutral'. Here's what economists, strategists, and leaders from the banking and finance industry had to say: "RBI’s bold move: what next after it cuts by 50bp?": Deepali Bhargava, Regional Head of Research, Asia-Pacific, ING "The RBI cut policy rates by more than expected and changed its policy stance from accommodative to neutral. We think that with this move, the RBI is signalling a near-term pause, while leaving the door open for more easing if growth or inflation weakens further. We continue to expect another 25bp rate cut in the fourth quarter of this year." "Neutral stance suggests fewer rate cuts ahead": Jeff Ng, Head of Asia Macro Strategy, Sumitomo Mitsui Banking Corporation "RBI may have decided to move quickly to a more appropriate policy rate level after recent headwinds and low inflation prints. A shift toward neutral stance means more rate cuts may be unlikely in the near-term." "MPC delivered major surprises with repo, CRR cuts": Siddhartha Sanyal, Chief Economist & Head of Research at Bandhan Bank "Today’s monetary policy committee (MPC) meeting sprang several major surprises. The 50-basis point repo rate cut came in as a surprise against consensus and our expectation of a 25bp rate cut. However, given the change in stance of monetary policy from “accommodative” to “neutral” and the RBI’s communication of very little space for more support from monetary policy, our expectation of a terminal repo rate of 5.50% in the current cycle remains largely unchanged. The larger than expected rate cut, coupled with announcement of a large CRR cut around the beginning of the busy season, brings in more focus on transmission of the monetary policy actions into the real economy. Today’s announcement will not only push banks’ external benchmark linked lending rates lower, but will also lower MCLR and deposit rates, thereby, bringing in greater pace and intensity to transmission." "Action-packed policy, out-of-the-box thinking": C.S. Setty, Chairman at SBI & Chairman at IBA "A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action. The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty." “Very dovish policy, capex boost expected”: Sagar Shah, Head – Domestic Markets, RBL Bank "Very dovish policy frontloading the Repo cut and liquidity infusion. Reduced cost of capital will lay groundwork for capex with a lag of 2 quarters. CRR cut along with Repo cut should lead to transmission faster." "RBI wants banks to act fast": Venkatakrishnan Srinivasan, Managing Partner, Rockfort Fincap "The RBI has front-loaded everything and wants banks to react now. By changing the stance, I think they are trying to indicate no immediate rate cuts." "Transmission now rests with banks": Madhavi Arora, Economist, Emkay Global Financial Services Ltd. "The ball is in the banks’ court to transmit easier financial conditions faster." "RBI’s intent is growth support amid uncertainty": Amit Bivalkar, Founder Director, Sapient Finserv "The RBI’s decision to cut the repo rate by a sharper-than-expected 50 basis points to 5.5% reflects its strong intent to support economic growth amid rising global uncertainties and weak domestic demand. The cumulative 100 bps cut since February 2025, along with the phased 1% CRR reduction, will ease borrowing costs and improve liquidity in the system, potentially boosting credit flow. However, with the shift in stance from ‘accommodative’ to ‘neutral’, the central bank has signaled a pause, choosing to closely monitor inflation trends and global developments before taking further action." "CRR cut to release ₹2.5 lakh crore liquidity": Dr. Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings Ltd. "The RBI’s Monetary Policy Committee (MPC) exceeded expectations by slashing the Repo rate by 50 basis points. Further, the cash reserve ratio (CRR) was reduced by 100 basis points from 4% to 3% in a staggered manner, implemented in four equal tranches of 25 basis points each, in the fortnights beginning September 6, October 4, November 1, and November 29 to provide durable liquidity. The cut in CRR is expected to release primary liquidity of about Rs 2.5 lakh crore to the banking system by the end of November 2025. The RBI changed its stance from ‘accommodative’ to ‘neutral.’ The outlook for food inflation is soft, and the core inflation outlook remains benign. Given the benign inflation, the inflation forecast for the year has been revised downward from 4% to 3.7%. The FY26 GDP growth forecast is maintained at 6.5 %. The risks are evenly balanced." "Rate cuts will spur lending, jobs, and growth": Dharan Shah, Founder, Tradonomy.AI "The RBI's decisive 50 bps repo rate cut to 5.5% and a 100 bps CRR reduction over four quarters unleash a powerful boost for India’s economy. By lowering borrowing costs and freeing up bank liquidity, sectors like real estate, automobiles, and consumer durables are set to thrive. With CPI inflation at 3.7% and FY26 GDP growth projected at 6.5%, fueled by steady rural demand and rising urban consumption, the USDINR forward rate at ~86.72 signals stability. This dual policy move will likely spur lending, investment, and job creation, despite global uncertainties. Now the RBI stance being neutral, all future RBI events for the next few quarters will be non-events." "Complex messaging: easing now, caution ahead": Sandeep Bagla, CEO, TRUST Mutual Fund "MPC frontloaded the rate cuts, reducing repo rates by 50 bps and also cut CRR by 100 bps. These measures came as a positive surprise to equity markets as there will be greater impetus to growth and there could be faster pick up in the interest rate sectors. Oddly, RBI also changed its stance from accommodative to neutral, thereby signaling that further softening of monetary conditions may not be easily forthcoming. Bond markets experienced some steepening with shorter end of the yield curve seeing some softening. It is complex messaging from RBI where they have eased the policy rates and liquidity but made no promises for the future." "Rate cuts support markets and rupee": Amit Pabari, MD, CR Forex "The Reserve Bank of India has delivered a sharper-than-expected policy easing, cutting the repo rate by 50 basis points to 5.5% and slashing the Cash Reserve Ratio by 100 basis points to 3%. These aggressive rate cuts are providing strong support to Indian equity markets, while the CRR reduction is expected to inject approximately ₹2.5 lakh crore of liquidity into the banking system. In addition, the RBI has shifted its policy stance from 'accommodative' to 'neutral', signalling that interest rates are likely to remain stable in the near term, which is supporting the rupee and limiting any further depreciation."

Amid global trade tensions, RBI’s surprise 50 bps repo rate cut triggered sharp reactions from top economists, bankers, and strategists.

RBI's bold 50 bps rate cut sparks market buzz: Here's what they say

In a bold move to revive growth and ease financing conditions, the Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting on June 6, 2025, announced a series of pro-growth measures.&nbsp;&nbsp;These include another repo rate cut, a phased CRR reduction, and a downward revision in the inflation forecast. The policy signals a continued effort by the central bank to support the economy amid a favourable inflation outlook and improving macroeconomic conditions. &nbsp;Here are the key announcements explained in detail:<h2>1. Repo rate cut by 50 basis points to 5.5%&nbsp;</h2>The RBI slashed the repo rate by 50 basis points, bringing it down to 5.5 per cent. This marks the third consecutive repo rate cut in 2025, following a 25-basis point cut in February, and another 25-basis point reduction in April.&nbsp; &nbsp;The cumulative rate cut now stands at 100 basis points for the calendar year.&nbsp;The repo rate is the rate at which the RBI lends to commercial banks. Lowering this rate makes loans cheaper, potentially boosting credit demand from consumers and corporates. With this aggressive rate action, the RBI aims to energise investment and spending across key sectors of the economy.<h2>2. CRR to be reduced by 100 basis points in four stages</h2>In a major liquidity-boosting measure, the RBI also announced a 100-basis point cut in the Cash Reserve Ratio (CRR) — from 4 per cent to 3 per cent. The CRR is the minimum percentage of a bank’s total deposits that must be held in reserve with the central bank. &nbsp;This reduction will be implemented in four tranches — on September 6, October 4, November 1, and November 29.&nbsp; &nbsp;According to the RBI, this move will inject nearly ₹2.5 lakh crore into the banking system, enhancing liquidity and supporting stronger credit growth.&nbsp;<h2>3. Inflation forecast for FY26 lowered to 3.7%</h2>The RBI revised down its inflation forecast for FY26 to 3.7 per cent, from its earlier estimate of 4 per cent. This signals that the central bank sees price pressures easing in the coming months.&nbsp;According to Governor Malhotra, factors such as record wheat production, higher output of pulses, and a moderation in global commodity prices are expected to help keep inflation in check. However, he cautioned that the RBI remains watchful of weather-related risks that could affect food prices.&nbsp;Here’s the revised quarterly CPI outlook:• Q1: 2.9 per cent• Q2: 3.4 per cent• Q3: 3.9 per cent• Q4: 4.4 per cent<h2>4. GDP growth forecast retained at 6.5% for FY26</h2>Despite the rate cuts and liquidity measures, the RBI chose to keep its GDP growth projection unchanged at 6.5 per cent for FY26, reflecting confidence in the resilience of the Indian economy.&nbsp;Growth is expected to be driven by reviving investment activity, steady rural demand, and above-normal monsoon forecasts. However, the central bank also highlighted downside risks from global trade tensions, weather uncertainties, and slower foreign inflows.Here are quarter-wise GDP estimates:• Q1: 6.5 per cent• Q2: 6.7 per cent• Q3: 6.6 per cent• Q4: 6.3 per cent<h2>5. Policy stance shifts from ‘accommodative’ to ‘neutral’</h2>In a notable shift, the MPC voted to change its policy stance from ‘accommodative’ to ‘neutral’, marking the end of an ultra-easy monetary phase. This means the central bank will now make future rate decisions based on evolving data, rather than being biased toward further cuts.&nbsp;While the RBI remains supportive of growth, it has also signalled readiness to respond quickly to any resurgence in inflation or external shocks.<h2>6. Sector-specific insights: lending stress eases, forex reserves strong</h2>Governor Malhotra noted that stress in unsecured loans and credit card segments has eased, although microfinance loans remain under pressure. On the external front, India’s merchandise and services exports are holding up well despite global headwinds.&nbsp; &nbsp;The current account deficit (CAD) for FY26 is projected to remain within sustainable levels, supported by resilient remittance inflows and a strong forex reserve position of $691.5 billion as of May-end.&nbsp;The June 2025 policy signals a strong push to accelerate India’s growth cycle, supported by lower rates and higher liquidity.&nbsp;&nbsp;At the same time, the RBI has shown prudence by adopting a neutral stance, reflecting its intent to remain flexible in a fluid global environment. &nbsp;

RBI unveils pro-growth measures including a repo rate cut and CRR reduction during its June 2025 MPC meet, aiming to support economic recovery.


In a bold move to revive growth and ease financing conditions, the Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting on June 6, 2025, announced a series of pro-growth measures. These include another repo rate cut, a phased CRR reduction, and a downward revision in the inflation forecast. The policy signals a continued effort by the central bank to support the economy amid a favourable inflation outlook and improving macroeconomic conditions. Here are the key announcements explained in detail: 1. Repo rate cut by 50 basis points to 5.5% The RBI slashed the repo rate by 50 basis points, bringing it down to 5.5 per cent. This marks the third consecutive repo rate cut in 2025, following a 25-basis point cut in February, and another 25-basis point reduction in April. The cumulative rate cut now stands at 100 basis points for the calendar year. The repo rate is the rate at which the RBI lends to commercial banks. Lowering this rate makes loans cheaper, potentially boosting credit demand from consumers and corporates. With this aggressive rate action, the RBI aims to energise investment and spending across key sectors of the economy. 2. CRR to be reduced by 100 basis points in four stages In a major liquidity-boosting measure, the RBI also announced a 100-basis point cut in the Cash Reserve Ratio (CRR) — from 4 per cent to 3 per cent. The CRR is the minimum percentage of a bank’s total deposits that must be held in reserve with the central bank. This reduction will be implemented in four tranches — on September 6, October 4, November 1, and November 29. According to the RBI, this move will inject nearly ₹2.5 lakh crore into the banking system, enhancing liquidity and supporting stronger credit growth. 3. Inflation forecast for FY26 lowered to 3.7% The RBI revised down its inflation forecast for FY26 to 3.7 per cent, from its earlier estimate of 4 per cent. This signals that the central bank sees price pressures easing in the coming months. According to Governor Malhotra, factors such as record wheat production, higher output of pulses, and a moderation in global commodity prices are expected to help keep inflation in check. However, he cautioned that the RBI remains watchful of weather-related risks that could affect food prices. Here’s the revised quarterly CPI outlook: • Q1: 2.9 per cent • Q2: 3.4 per cent • Q3: 3.9 per cent • Q4: 4.4 per cent 4. GDP growth forecast retained at 6.5% for FY26 Despite the rate cuts and liquidity measures, the RBI chose to keep its GDP growth projection unchanged at 6.5 per cent for FY26, reflecting confidence in the resilience of the Indian economy. Growth is expected to be driven by reviving investment activity, steady rural demand, and above-normal monsoon forecasts. However, the central bank also highlighted downside risks from global trade tensions, weather uncertainties, and slower foreign inflows. Here are quarter-wise GDP estimates: • Q1: 6.5 per cent • Q2: 6.7 per cent • Q3: 6.6 per cent • Q4: 6.3 per cent 5. Policy stance shifts from ‘accommodative’ to ‘neutral’ In a notable shift, the MPC voted to change its policy stance from ‘accommodative’ to ‘neutral’, marking the end of an ultra-easy monetary phase. This means the central bank will now make future rate decisions based on evolving data, rather than being biased toward further cuts. While the RBI remains supportive of growth, it has also signalled readiness to respond quickly to any resurgence in inflation or external shocks. 6. Sector-specific insights: lending stress eases, forex reserves strong Governor Malhotra noted that stress in unsecured loans and credit card segments has eased, although microfinance loans remain under pressure. On the external front, India’s merchandise and services exports are holding up well despite global headwinds. The current account deficit (CAD) for FY26 is projected to remain within sustainable levels, supported by resilient remittance inflows and a strong forex reserve position of $691.5 billion as of May-end. The June 2025 policy signals a strong push to accelerate India’s growth cycle, supported by lower rates and higher liquidity. At the same time, the RBI has shown prudence by adopting a neutral stance, reflecting its intent to remain flexible in a fluid global environment.

RBI announces a repo rate cut, CRR reduction, and lower inflation forecast to boost growth and liquidity.

RBI MPC meeting: Here are the key highlights from the central bank’s June 2025 policy review

India’s Goods and Services Tax (GST) collections remained above the ₹2 lakh crore mark (approx. $24.1 billion) for the second consecutive month in May 2025, registering a robust 16.4 per cent year-on-year growth.&nbsp;&nbsp;The latest data, released by the Ministry of Finance, comes just days before the Reserve Bank of India (RBI) convenes for its bi-monthly Monetary Policy Committee (MPC) meeting on 4 June.&nbsp;The total GST revenue stood at ₹2.01 lakh crore ($24.1 billion) in May, compared to ₹1.72 lakh crore ($20.6 billion) in May 2024.&nbsp; &nbsp;This follows a record ₹2.37 lakh crore ($28.4 billion) collection in April 2025. Net revenue after refunds amounted to ₹1.74 lakh crore ($20.8 billion), a sharp 20.4 per cent rise from the ₹1.44 lakh crore ($17.2 billion) collected in May last year.<h2>Import-led growth raises questions on consumption patterns</h2>The growth was driven largely by import-related taxes. GST revenue from imports rose 25.2 per cent to ₹51,266 crore ($6.2 billion), while domestic transactions contributed ₹1.50 lakh crore ($18 billion)—up 13.7 per cent from the previous year.&nbsp;&nbsp;Total refunds issued declined 4 per cent to ₹27,210 crore ($3.26 billion).&nbsp;“The 16 per cent growth in GST collections in the month shows a renewed upward momentum after a few months of growth in the range of 11–12 per cent,” Pratik Jain, Partner at Price Waterhouse &amp; Co LLP, told PTI. “If this growth sustains over the next few months, it might provide a cushion for the government to consider rate rationalisation, on which significant groundwork has already been done,” he added.&nbsp;However, experts warn that the growth pattern is not uniform across India. States like Maharashtra, West Bengal, Karnataka, and Tamil Nadu posted strong collection growth of 17–25 per cent, while states such as Gujarat and Telangana lagged with growth below 6 per cent, according to M S Mani, Partner at Deloitte India, quoted by PTI.&nbsp;“The average growth across the country does not appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors which require deeper, data-based analysis,” Mani said.<h2>Domestic demand lags, import surge continues</h2>Several tax analysts believe the growth is being powered by imports rather than domestic consumption. Vivek Jalan, Partner at Tax Connect Advisory Services LLP, told PTI&nbsp;that while import-related GST rose nearly 73 per cent, domestic revenue growth was modest in comparison. “This, coupled with the fact that export refunds are not growing correspondingly, reflects the fact that import growth far exceeds export growth,” Jalan explained.&nbsp;EY India’s Saurabh Agarwal also told PTI&nbsp;that similar numbers could be seen in June owing to ongoing geopolitical developments impacting global trade flows.<h2>RBI to weigh strong GST data and soft inflation in June MPC meeting</h2>The strong GST collections—an indicator of sustained economic activity—arrive just as the Reserve Bank of India prepares for its rate-setting Monetary Policy Committee (MPC) meeting, scheduled from 4–6 June.&nbsp; Economists widely expect the six-member panel to deliver a 25-basis point rate cut, reducing the repo rate from 6 per cent to 5.75 per cent, in what could be the third consecutive rate cut in 2025. The move is backed by a steep fall in inflation. India’s consumer price index (CPI) dropped to 3.2 per cent in April, the lowest in nearly five years. This aligns well within the RBI’s flexible inflation targeting framework of 4 per cent ± 2 per cent.&nbsp; According to the RBI’s annual report, “The benign inflation outlook and moderate growth warrant monetary policy to be growth supportive, while remaining watchful about rapidly evolving global macroeconomic conditions.” Market participants and lenders are also anticipating a total of 50 basis points in rate cuts for FY26, which would help lower external benchmark lending rates (EBLR) and reduce borrowing costs for home, auto and personal loans.&nbsp; As GST revenues remain strong and inflation eases, the central bank may find ample headroom to support India’s growth trajectory through accommodative monetary policy.&nbsp;

The most recent GST figures, published by the Ministry of Finance, arrive only days ahead of the Reserve Bank of India (RBI) gathering for its bi-monthly Monetary Policy Committee (MPC) session on 4 June.

India’s Goods and Services Tax (GST) collections remained above the ₹2 lakh crore mark (approx. $24.1 billion) for the second consecutive month in May 2025, registering a robust 16.4 per cent year-on-year growth. The latest data, released by the Ministry of Finance, comes just days before the Reserve Bank of India (RBI) convenes for its bi-monthly Monetary Policy Committee (MPC) meeting on 4 June. The total GST revenue stood at ₹2.01 lakh crore ($24.1 billion) in May, compared to ₹1.72 lakh crore ($20.6 billion) in May 2024. This follows a record ₹2.37 lakh crore ($28.4 billion) collection in April 2025. Net revenue after refunds amounted to ₹1.74 lakh crore ($20.8 billion), a sharp 20.4 per cent rise from the ₹1.44 lakh crore ($17.2 billion) collected in May last year. Import-led growth raises questions on consumption patterns The growth was driven largely by import-related taxes. GST revenue from imports rose 25.2 per cent to ₹51,266 crore ($6.2 billion), while domestic transactions contributed ₹1.50 lakh crore ($18 billion)—up 13.7 per cent from the previous year. Total refunds issued declined 4 per cent to ₹27,210 crore ($3.26 billion). “The 16 per cent growth in GST collections in the month shows a renewed upward momentum after a few months of growth in the range of 11–12 per cent,” Pratik Jain, Partner at Price Waterhouse & Co LLP, told PTI. “If this growth sustains over the next few months, it might provide a cushion for the government to consider rate rationalisation, on which significant groundwork has already been done,” he added. However, experts warn that the growth pattern is not uniform across India. States like Maharashtra, West Bengal, Karnataka, and Tamil Nadu posted strong collection growth of 17–25 per cent, while states such as Gujarat and Telangana lagged with growth below 6 per cent, according to M S Mani, Partner at Deloitte India, quoted by PTI. “The average growth across the country does not appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors which require deeper, data-based analysis,” Mani said. Domestic demand lags, import surge continues Several tax analysts believe the growth is being powered by imports rather than domestic consumption. Vivek Jalan, Partner at Tax Connect Advisory Services LLP, told PTI that while import-related GST rose nearly 73 per cent, domestic revenue growth was modest in comparison. “This, coupled with the fact that export refunds are not growing correspondingly, reflects the fact that import growth far exceeds export growth,” Jalan explained. EY India’s Saurabh Agarwal also told PTI that similar numbers could be seen in June owing to ongoing geopolitical developments impacting global trade flows. RBI to weigh strong GST data and soft inflation in June MPC meeting The strong GST collections—an indicator of sustained economic activity—arrive just as the Reserve Bank of India prepares for its rate-setting Monetary Policy Committee (MPC) meeting, scheduled from 4–6 June. Economists widely expect the six-member panel to deliver a 25-basis point rate cut, reducing the repo rate from 6 per cent to 5.75 per cent, in what could be the third consecutive rate cut in 2025. The move is backed by a steep fall in inflation. India’s consumer price index (CPI) dropped to 3.2 per cent in April, the lowest in nearly five years. This aligns well within the RBI’s flexible inflation targeting framework of 4 per cent ± 2 per cent. According to the RBI’s annual report, “The benign inflation outlook and moderate growth warrant monetary policy to be growth supportive, while remaining watchful about rapidly evolving global macroeconomic conditions.” Market participants and lenders are also anticipating a total of 50 basis points in rate cuts for FY26, which would help lower external benchmark lending rates (EBLR) and reduce borrowing costs for home, auto and personal loans. As GST revenues remain strong and inflation eases, the central bank may find ample headroom to support India’s growth trajectory through accommodative monetary policy.

In May 2025, India's Goods and Services Tax (GST) collections exceeded ₹2 lakh crore (around $24.1 billion) for the second month in a row, showing a strong year-on-year growth of 16.4 percent.

India’s GST collections cross $24 billion in May: What it signals before RBI policy review

The RBI annual report shows a nuanced picture of counterfeiting in India. Even though there is a decrease in the total number of counterfeited notes for the third consecutive year, there has been a significant surge in the counterfeiting of Rs 500 notes.&nbsp;According to the report released on May 29, 2025, banks have detected 2,17,396 fake currency notes in FY 25, a decrease in number from 2,22,639 in FY24 and &nbsp;2,25,769 in FY23, implying the enhanced security features of the banknotes and increased vigilance in the banking sector.&nbsp;Notably, the troubling trend is the increase in counterfeit Rs 500 notes, which witnessed a year-over-year (y-o-y) growth of 37.3 per cent, with 1.18 lakh fake notes being detected in FY25, up from 85,711 detected in FY24. A similar trend was observed for Rs 200 notes, with a fake currency count of 32,660.A contrasting trend is seen for counterfeit Rs 2000 notes, with only 3,508 pieces compared to the 26,035 of last year, a total decrease of 86.5 per cent. A similar trend was observed for the counterfeit detection of the lower denominations, like Rs 10, Rs 20, Rs 50 and Rs 100.&nbsp;<h2>Why is it alarming</h2>This is alarming considering the distribution of denominations in the notes that are in circulation in the market. Rs500 constitutes 40.9 per cent of all the currency in circulation, and it accounts for 80.6 per cent of the total value of the market currencies. So this denomination is central to India's cash flow. Demonatisation which was announced in 2016 to cripple terror funding, counterfeiting and reduce black money in circulation, doesn't reflect in the data. The fake currency note of Rs 2000 did witness a decline, which is partly due to its gradual withdrawal from circulation. Security agencies have persistently established a link between counterfeiting and terrorism. In the early 2010s, Indian security agencies traced counterfeit notes to Pakistan ISI-backed printing facilities. This recent RBI report is counter to the government's narrative and raises major red flags.The central bank is responding to these challenges with increased vigilance. It has ceased printing of Rs 2, Rs 5 and Rs 2000 notes. It is also promoting the Indian digital rupee, with its value increased by 334 per cent in 2024-25.&nbsp;&nbsp;

RBI reports surge in counterfeit Rs 500 Notes amid overall decline in fake currency detection 

The RBI annual report shows a nuanced picture of counterfeiting in India. Even though there is a decrease in the total number of counterfeited notes for the third consecutive year, there has been a significant surge in the counterfeiting of Rs 500 notes. According to the report released on May 29, 2025, banks have detected 2,17,396 fake currency notes in FY 25, a decrease in number from 2,22,639 in FY24 and 2,25,769 in FY23, implying the enhanced security features of the banknotes and increased vigilance in the banking sector. Notably, the troubling trend is the increase in counterfeit Rs 500 notes, which witnessed a year-over-year (y-o-y) growth of 37.3 per cent, with 1.18 lakh fake notes being detected in FY25, up from 85,711 detected in FY24. A similar trend was observed for Rs 200 notes, with a fake currency count of 32,660. A contrasting trend is seen for counterfeit Rs 2000 notes, with only 3,508 pieces compared to the 26,035 of last year, a total decrease of 86.5 per cent. A similar trend was observed for the counterfeit detection of the lower denominations, like Rs 10, Rs 20, Rs 50 and Rs 100. Why is it alarming This is alarming considering the distribution of denominations in the notes that are in circulation in the market. Rs500 constitutes 40.9 per cent of all the currency in circulation, and it accounts for 80.6 per cent of the total value of the market currencies. So this denomination is central to India's cash flow. Demonatisation which was announced in 2016 to cripple terror funding, counterfeiting and reduce black money in circulation, doesn't reflect in the data. The fake currency note of Rs 2000 did witness a decline, which is partly due to its gradual withdrawal from circulation. Security agencies have persistently established a link between counterfeiting and terrorism. In the early 2010s, Indian security agencies traced counterfeit notes to Pakistan ISI-backed printing facilities. This recent RBI report is counter to the government's narrative and raises major red flags. The central bank is responding to these challenges with increased vigilance. It has ceased printing of Rs 2, Rs 5 and Rs 2000 notes. It is also promoting the Indian digital rupee, with its value increased by 334 per cent in 2024-25.

RBI reports surge in counterfeit Rs 500 Notes amid overall decline in fake currency detection&nbsp;

RBI flags increase in counterfeits of high value denomination

In a financial year marked by volatile global headwinds, the Reserve Bank of India (RBI) delivered a record ₹2.69 lakh crore ($32.28 billion) surplus to the government, by 27.3 per cent from the previous year’s ₹2.11 lakh crore ($25.32 billion).&nbsp;According to the RBI Annual Report for FY2024–25, this sharp jump in net income was driven by higher foreign exchange transaction gains, interest from foreign securities, and a cautious hike in its contingency risk buffer.&nbsp;While this windfall gives the Centre significant fiscal breathing space for its capital spending and welfare programs, the report also outlines a bold technology-forward vision for FY26 anchored around digital currency pilots, AI deployment, and cross-border innovation.<h2>Stronger balance sheet, bigger dividend</h2>As per the annual report, the central bank’s net income surged 27.3 per cent year-on-year to ₹2.69 lakh crore ($32.28 billion) in FY25, up from ₹2.11 lakh crore ($25.32 billion) the previous year. This includes gains of ₹11.1 lakh crore ($133.2 billion) from foreign exchange transactions, and ₹9.7 lakh crore ($116.4 billion) in interest income from foreign securities.&nbsp;The RBI’s balance sheet expanded 8.2 per cent to ₹76.25 lakh crore ($915 billion), with foreign assets accounting for over 74 per cent of the total. Notably, the central bank’s gold holdings rose by 57.5 metric tonnes to 879.6 metric tonnes as of March 2025.&nbsp;A significant portion of the income of ₹2.68 lakh crore ($32.16 billion) has already been transferred to the central government as surplus, a move expected to ease fiscal pressures, support capital spending, and inject liquidity into the banking system by early July, according to economists cited in the report.&nbsp;The report also highlights that the Contingency Risk Buffer (CRB), which helps cushion against economic shocks was maintained at 6.5 per cent, the same level as FY24.&nbsp;Inflation, growth, and monetary policy: RBI’s balancing actThe RBI’s latest report offers a cautiously optimistic view of the Indian economy. According to the central bank, headline inflation is likely to converge to the 4 per cent target over the next 12 months, thanks to a favourable mix of macroeconomic conditions.&nbsp;These include easing global supply chain pressures, softening of international commodity prices, and above-normal rainfall boosting agricultural output.&nbsp;At the same time, GDP growth for FY26 is projected at 6.5 per cent, with the momentum driven by private consumption, healthy corporate and banking balance sheets, and the government’s continued focus on capital expenditure.&nbsp;In response to moderating inflation and subdued economic momentum, the RBI has already cut the policy repo rate by 50 basis points since February, and adopted a ‘growth-supportive’ accommodative stance in April.&nbsp;However, the path forward is not without risks. The RBI flagged a range of external headwinds, rising protectionism, geopolitical conflicts, and volatile financial markets that could threaten both inflation and growth targets. Of particular concern is the return of US tariffs under President Donald Trump, which have added uncertainty to global trade flows and emerging market stability.&nbsp;According to the report, “While the outlook remains promising, downside risks to growth and upside risks to inflation persist due to evolving global dynamics.”<h2>Digital rupee, FX platform, and CBDC pilots: What’s next for RBI?</h2>The RBI is making it clear that India’s digital financial future is no longer experimental, it’s strategic.&nbsp;According to the report, the RBI will expand the pilots for central bank digital currency (CBDC) in both retail (e₹-Retail) and wholesale (e₹-Wholesale) segments. Building on groundwork laid over the past two years, the central bank now plans to test cross-border CBDC transactions, both bilateral and multilateral to make global payments faster, more transparent, and more secure.&nbsp;In addition, the RBI will link its FX-Retail platform with Bharat Connect, a move aimed at democratising access to forex markets for small businesses and individual users. This is particularly significant as India’s foreign exchange reserves peaked at $704 billion in September 2024, and the RBI was the top net seller of forex among Asian central banks in January 2025, according to estimates from Nomura and DBS Bank.&nbsp;The digital push doesn’t end there. The RBI will also roll out new CBDC use cases, such as B2B payments under the Unified Ledger Interface (ULI), and scale up Milehunter.ai™, its AI-driven analytics platform. To accompany this digital acceleration, the central bank will also develop a framework for the responsible and ethical use of AI in the financial sector.&nbsp;These pilots and platforms, the report notes, are designed to overcome persistent inefficiencies in the current system, especially those related to turnaround time, traceability, and cross-border transaction costs.<h2>Bank fraud amount triples despite drop in cases</h2>One of the more concerning takeaways from the report is the sharp rise in the value of bank frauds.&nbsp;While the total number of fraud cases declined by 34 per cent to 23,953 in FY25, the value of frauds tripled to ₹36,014 crore ($432.17 million), up from roughly ₹12,000 crore ($144 million) in FY24.&nbsp;According to the RBI annual report, this spike was largely due to the reclassification of 122 legacy fraud cases worth ₹18,674 crore ($224.08 million), after a March 2023 Supreme Court ruling mandated re-examination.&nbsp;Private sector banks reported the highest number of fraud incidents at 14,233 cases, accounting for 59.4 per cent of total frauds. But in terms of value, state-owned banks bore the brunt, accounting for ₹25,667 crore ($307.99 million) (71.3 per cent of total fraud value) compared to ₹10,088 crore ($121.05 million) by private lenders.&nbsp;Most of these frauds occurred in two areas:• Digital payments (cards/internet): 13,516 cases, ₹520 crore ($6.24 million)• Loan/advances segment: 7,950 cases, ₹33,148 crore ($398 million)&nbsp;The RBI noted that while digital frauds dominate in private banks, loan-related frauds remain concentrated in public sector banks, raising concerns about credit risk monitoring and recovery.&nbsp;

Business & Economy: One of the more concerning takeaways from the RBI report is the sharp rise in the value of bank frauds.

In a financial year marked by volatile global headwinds, the Reserve Bank of India (RBI) delivered a record ₹2.69 lakh crore ($32.28 billion) surplus to the government, by 27.3 per cent from the previous year’s ₹2.11 lakh crore ($25.32 billion). According to the RBI Annual Report for FY2024–25, this sharp jump in net income was driven by higher foreign exchange transaction gains, interest from foreign securities, and a cautious hike in its contingency risk buffer. While this windfall gives the Centre significant fiscal breathing space for its capital spending and welfare programs, the report also outlines a bold technology-forward vision for FY26 anchored around digital currency pilots, AI deployment, and cross-border innovation. Stronger balance sheet, bigger dividend As per the annual report, the central bank’s net income surged 27.3 per cent year-on-year to ₹2.69 lakh crore ($32.28 billion) in FY25, up from ₹2.11 lakh crore ($25.32 billion) the previous year. This includes gains of ₹11.1 lakh crore ($133.2 billion) from foreign exchange transactions, and ₹9.7 lakh crore ($116.4 billion) in interest income from foreign securities. The RBI’s balance sheet expanded 8.2 per cent to ₹76.25 lakh crore ($915 billion), with foreign assets accounting for over 74 per cent of the total. Notably, the central bank’s gold holdings rose by 57.5 metric tonnes to 879.6 metric tonnes as of March 2025. A significant portion of the income of ₹2.68 lakh crore ($32.16 billion) has already been transferred to the central government as surplus, a move expected to ease fiscal pressures, support capital spending, and inject liquidity into the banking system by early July, according to economists cited in the report. The report also highlights that the Contingency Risk Buffer (CRB), which helps cushion against economic shocks was maintained at 6.5 per cent, the same level as FY24. Inflation, growth, and monetary policy: RBI’s balancing act The RBI’s latest report offers a cautiously optimistic view of the Indian economy. According to the central bank, headline inflation is likely to converge to the 4 per cent target over the next 12 months, thanks to a favourable mix of macroeconomic conditions. These include easing global supply chain pressures, softening of international commodity prices, and above-normal rainfall boosting agricultural output. At the same time, GDP growth for FY26 is projected at 6.5 per cent, with the momentum driven by private consumption, healthy corporate and banking balance sheets, and the government’s continued focus on capital expenditure. In response to moderating inflation and subdued economic momentum, the RBI has already cut the policy repo rate by 50 basis points since February, and adopted a ‘growth-supportive’ accommodative stance in April. However, the path forward is not without risks. The RBI flagged a range of external headwinds, rising protectionism, geopolitical conflicts, and volatile financial markets that could threaten both inflation and growth targets. Of particular concern is the return of US tariffs under President Donald Trump, which have added uncertainty to global trade flows and emerging market stability. According to the report, “While the outlook remains promising, downside risks to growth and upside risks to inflation persist due to evolving global dynamics.” Digital rupee, FX platform, and CBDC pilots: What’s next for RBI? The RBI is making it clear that India’s digital financial future is no longer experimental, it’s strategic. According to the report, the RBI will expand the pilots for central bank digital currency (CBDC) in both retail (e₹-Retail) and wholesale (e₹-Wholesale) segments. Building on groundwork laid over the past two years, the central bank now plans to test cross-border CBDC transactions, both bilateral and multilateral to make global payments faster, more transparent, and more secure. In addition, the RBI will link its FX-Retail platform with Bharat Connect, a move aimed at democratising access to forex markets for small businesses and individual users. This is particularly significant as India’s foreign exchange reserves peaked at $704 billion in September 2024, and the RBI was the top net seller of forex among Asian central banks in January 2025, according to estimates from Nomura and DBS Bank. The digital push doesn’t end there. The RBI will also roll out new CBDC use cases, such as B2B payments under the Unified Ledger Interface (ULI), and scale up Milehunter.ai™, its AI-driven analytics platform. To accompany this digital acceleration, the central bank will also develop a framework for the responsible and ethical use of AI in the financial sector. These pilots and platforms, the report notes, are designed to overcome persistent inefficiencies in the current system, especially those related to turnaround time, traceability, and cross-border transaction costs. Bank fraud amount triples despite drop in cases One of the more concerning takeaways from the report is the sharp rise in the value of bank frauds. While the total number of fraud cases declined by 34 per cent to 23,953 in FY25, the value of frauds tripled to ₹36,014 crore ($432.17 million), up from roughly ₹12,000 crore ($144 million) in FY24. According to the RBI annual report, this spike was largely due to the reclassification of 122 legacy fraud cases worth ₹18,674 crore ($224.08 million), after a March 2023 Supreme Court ruling mandated re-examination. Private sector banks reported the highest number of fraud incidents at 14,233 cases, accounting for 59.4 per cent of total frauds. But in terms of value, state-owned banks bore the brunt, accounting for ₹25,667 crore ($307.99 million) (71.3 per cent of total fraud value) compared to ₹10,088 crore ($121.05 million) by private lenders. Most of these frauds occurred in two areas: • Digital payments (cards/internet): 13,516 cases, ₹520 crore ($6.24 million) • Loan/advances segment: 7,950 cases, ₹33,148 crore ($398 million) The RBI noted that while digital frauds dominate in private banks, loan-related frauds remain concentrated in public sector banks, raising concerns about credit risk monitoring and recovery.

Amid global tension, the central bank of India's annual report for FY24- 25 delivered a record ₹2.69 lakh crore surplus to the government, by 27.3 per cent from the previous year’s ₹2.11 lakh crore.&nbsp;

From ₹2.69 lakh cr surplus to digital rupee pilots: Here's what RBI’s FY25 annual report outlines

India is poised to weather ongoing global economic turbulence, according to the Reserve Bank of India’s (RBI) latest bulletin, which highlights strong macro fundamentals, easing inflation, and strategic foreign exchange management.&nbsp;&nbsp;At the same time, New Delhi is navigating shifting global trade currents — from a critical tariff truce with the US to the successful conclusion of a landmark free trade agreement with the United Kingdom.&nbsp;“The global economic outlook remains clouded amidst shifting policy landscapes and lingering vulnerabilities,” the RBI said in its May bulletin. “India stands well-positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth.”<h2>RBI eases rates, inflation cools</h2>Retail inflation dropped to 3.16 per cent in April, marking the third consecutive month below the RBI’s 4 per cent target and the lowest level since July 2019. With inflationary pressures easing, the central bank adopted an ‘accommodative’ monetary policy stance, cutting rates for the second time in April and signalling further support to spur growth.&nbsp;The bulletin also warned of increasing temperature anomalies affecting vegetable prices, calling for quicker adoption of climate-resilient crops to support long-term price stability.<h2>Forex reserves surge amid rupee rally</h2>In a sign of active intervention, the RBI reported a net purchase of $14.36 billion in the spot foreign exchange market in March, reversing a $1.6 billion net sale in February. This move came as the Indian rupee appreciated over 2 per cent during the month, buoyed by a weaker US dollar and strong foreign inflows.&nbsp;The rupee traded between 85.39 and 87.44 per US dollar in March and stood at 85.6375 on 22 May. Meanwhile, the RBI’s net forward sale contracts stood at $84.35 billion by end-March, indicating continued efforts to manage currency volatility.<h2>IMF outlook: India to remain fastest-growing major economy</h2>The International Monetary Fund (IMF) echoed a similarly positive tone. In its latest World Economic Outlook, the IMF projected India’s economy to grow by 6.8 per cent in 2025, making it the fastest-growing major economy in the world.&nbsp; The Fund credited robust domestic demand, public infrastructure spending, and resilient services exports for India’s growth momentum, even as global growth remains subdued.&nbsp;The IMF also praised India’s efforts in maintaining macroeconomic stability, especially amid tight global financial conditions and ongoing geopolitical uncertainty.<h2>Navigating to global trade tension&nbsp;</h2> The RBI’s optimism comes as India recalibrates its global trade strategy. Following President Donald Trump’s 9 April announcement of a 90-day tariff pause, India is racing to clinch a trade deal with the US to prevent a punitive 26 per cent tariff on Indian exports.&nbsp; The pause provides a narrow window for negotiation, with New Delhi eyeing quicker access for key sectors such as pharmaceuticals, textiles, and IT services. In contrast, India has scored a major breakthrough on the western front. Earlier this month, India and the UK concluded negotiations for a long-awaited free trade agreement (FTA) — a deal in the works since January 2022. The India-UK trade pact aims to double bilateral trade from $60 billion to $120 billion by 2030. It eliminates import duties on 99 per cent of Indian goods entering the UK, granting enhanced access for sectors such as textiles, gems and jewellery, auto parts, and agriculture. In return, British firms will gain broader access to India’s fast-growing market, including in areas like legal services, education, and renewable energy.&nbsp; India has also ensured protection for sensitive sectors, maintaining a balance between liberalisation and domestic interests.&nbsp;

Business & Economy: RBI's bulletin comes at a time when New Delhi is navigating shifting global trade currents — from a critical tariff truce with the US to the successful conclusion of a landmark free trade agreement with the United Kingdom.

India is poised to weather ongoing global economic turbulence, according to the Reserve Bank of India’s (RBI) latest bulletin, which highlights strong macro fundamentals, easing inflation, and strategic foreign exchange management. At the same time, New Delhi is navigating shifting global trade currents — from a critical tariff truce with the US to the successful conclusion of a landmark free trade agreement with the United Kingdom. “The global economic outlook remains clouded amidst shifting policy landscapes and lingering vulnerabilities,” the RBI said in its May bulletin. “India stands well-positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth.” RBI eases rates, inflation cools Retail inflation dropped to 3.16 per cent in April, marking the third consecutive month below the RBI’s 4 per cent target and the lowest level since July 2019. With inflationary pressures easing, the central bank adopted an ‘accommodative’ monetary policy stance, cutting rates for the second time in April and signalling further support to spur growth. The bulletin also warned of increasing temperature anomalies affecting vegetable prices, calling for quicker adoption of climate-resilient crops to support long-term price stability. Forex reserves surge amid rupee rally In a sign of active intervention, the RBI reported a net purchase of $14.36 billion in the spot foreign exchange market in March, reversing a $1.6 billion net sale in February. This move came as the Indian rupee appreciated over 2 per cent during the month, buoyed by a weaker US dollar and strong foreign inflows. The rupee traded between 85.39 and 87.44 per US dollar in March and stood at 85.6375 on 22 May. Meanwhile, the RBI’s net forward sale contracts stood at $84.35 billion by end-March, indicating continued efforts to manage currency volatility. IMF outlook: India to remain fastest-growing major economy The International Monetary Fund (IMF) echoed a similarly positive tone. In its latest World Economic Outlook, the IMF projected India’s economy to grow by 6.8 per cent in 2025, making it the fastest-growing major economy in the world. The Fund credited robust domestic demand, public infrastructure spending, and resilient services exports for India’s growth momentum, even as global growth remains subdued. The IMF also praised India’s efforts in maintaining macroeconomic stability, especially amid tight global financial conditions and ongoing geopolitical uncertainty. Navigating to global trade tension The RBI’s optimism comes as India recalibrates its global trade strategy. Following President Donald Trump’s 9 April announcement of a 90-day tariff pause, India is racing to clinch a trade deal with the US to prevent a punitive 26 per cent tariff on Indian exports. The pause provides a narrow window for negotiation, with New Delhi eyeing quicker access for key sectors such as pharmaceuticals, textiles, and IT services. In contrast, India has scored a major breakthrough on the western front. Earlier this month, India and the UK concluded negotiations for a long-awaited free trade agreement (FTA) — a deal in the works since January 2022. The India-UK trade pact aims to double bilateral trade from $60 billion to $120 billion by 2030. It eliminates import duties on 99 per cent of Indian goods entering the UK, granting enhanced access for sectors such as textiles, gems and jewellery, auto parts, and agriculture. In return, British firms will gain broader access to India’s fast-growing market, including in areas like legal services, education, and renewable energy. India has also ensured protection for sensitive sectors, maintaining a balance between liberalisation and domestic interests.

&nbsp;According to the Reserve Bank of India’s (RBI) latest bulletin, India is poised to weather ongoing global economic turbulence, highlighting strong macro fundamentals, easing inflation, and strategic foreign exchange management.&nbsp;

RBI says India remains resilient as global trade landscape shifts

India&rsquo;s retail inflation, based on the Consumer Price Index (CPI), eased to 3.16 per cent in April, from 3.34 per cent in March. It is the lowest year-on-year inflation since July 2019, according to data released by the Ministry of Statistics &amp; Programme Implementation on May 13.
The moderation in inflation was primarily driven by a significant decline in food prices. Food inflation fell sharply to 1.78 per cent in April from 2.69 per cent in March&mdash;a decline of 91 basis points. This is the lowest level of food inflation recorded since October 2021.
The steep decline is attributed to lower inflation in vegetables, pulses, fruits, meat and fish, personal care items, and cereals.
Rural inflation slowed more sharply, falling to 2.92 per cent in April from 3.25 per cent in March. Rural food inflation dropped to 1.85 per cent from 2.82 per cent. In urban areas, inflation dipped to 3.36 per cent from 3.43 per cent, while urban food inflation saw a more pronounced decline to 1.64 per cent from 2.48 per cent in March.
Kerala witnessed the highest inflation at 5.94 per cent year-on-year, followed by Karnataka (4.26 per cent), Jammu &amp; Kashmir (4.25 per cent) and Punjab (4.09 per cent), while Telangana and Delhi saw the lowest inflation at 1.26 per cent and 1.77 per cent, respectively.
Among key components, housing inflation remained stable at 3.00 per cent compared to 3.03 per cent in March, while education inflation ticked up to 4.13 per cent from 3.98 per cent. Health inflation remained flat at 4.25 per cent.
But notably, fuel and light inflation advanced to 2.92 per cent, from 1.42 per cent the previous month. Transport and communication inflation rose to 3.73 per cent from 3.36 per cent.
<h2 dir="ltr">RBI&rsquo;s target holds steady</h2>
The Reserve Bank of India, which has been mandated to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side, has cut the key interest rate by 50 basis points in two tranches (February and April) to 6 per cent underpinned by easing inflation.
The central bank has projected the CPI inflation for the financial year 2025-26 at 4 per cent, with Q1 at 3.6 per cent, Q2 at 3.9 per cent, Q3 at 3.8 per cent, and Q4 at 4.4 per cent.
With inflation trends remaining well within the target range, market expectations for a potential rate cut in the upcoming meeting of RBI&rsquo;s Monetary Policy Committee (MPC) in June have strengthened.
&nbsp;

Business & Economy: The moderation in inflation was primarily driven by a decline in food prices. Food inflation fell to 1.78 per cent, the lowest since October 2021.

India’s retail inflation, based on the Consumer Price Index (CPI), eased to 3.16 per cent in April, from 3.34 per cent in March. It is the lowest year-on-year inflation since July 2019, according to data released by the Ministry of Statistics & Programme Implementation on May 13. The moderation in inflation was primarily driven by a significant decline in food prices. Food inflation fell sharply to 1.78 per cent in April from 2.69 per cent in March—a decline of 91 basis points. This is the lowest level of food inflation recorded since October 2021. The steep decline is attributed to lower inflation in vegetables, pulses, fruits, meat and fish, personal care items, and cereals. Rural inflation slowed more sharply, falling to 2.92 per cent in April from 3.25 per cent in March. Rural food inflation dropped to 1.85 per cent from 2.82 per cent. In urban areas, inflation dipped to 3.36 per cent from 3.43 per cent, while urban food inflation saw a more pronounced decline to 1.64 per cent from 2.48 per cent in March. Kerala witnessed the highest inflation at 5.94 per cent year-on-year, followed by Karnataka (4.26 per cent), Jammu & Kashmir (4.25 per cent) and Punjab (4.09 per cent), while Telangana and Delhi saw the lowest inflation at 1.26 per cent and 1.77 per cent, respectively. Among key components, housing inflation remained stable at 3.00 per cent compared to 3.03 per cent in March, while education inflation ticked up to 4.13 per cent from 3.98 per cent. Health inflation remained flat at 4.25 per cent. But notably, fuel and light inflation advanced to 2.92 per cent, from 1.42 per cent the previous month. Transport and communication inflation rose to 3.73 per cent from 3.36 per cent. RBI’s target holds steady The Reserve Bank of India, which has been mandated to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side, has cut the key interest rate by 50 basis points in two tranches (February and April) to 6 per cent underpinned by easing inflation. The central bank has projected the CPI inflation for the financial year 2025-26 at 4 per cent, with Q1 at 3.6 per cent, Q2 at 3.9 per cent, Q3 at 3.8 per cent, and Q4 at 4.4 per cent. With inflation trends remaining well within the target range, market expectations for a potential rate cut in the upcoming meeting of RBI’s Monetary Policy Committee (MPC) in June have strengthened.

India’s retail inflation hits a 6-year low as food prices cool

Starting today, withdrawing cash from ATMs&mdash;or even just checking your balance&mdash;might cost you more. The Reserve Bank of India&rsquo;s (RBI) revised guidelines have come into effect from May 1, 2025, increasing the maximum fees banks can charge customers once they exhaust their monthly quota of free ATM transactions.
Whether it&rsquo;s a cash withdrawal, PIN change, or mini statement, every extra swipe beyond your free limit could now pinch your pocket a bit harder.
<h2 class="x_elementToProof">What&rsquo;s changing from May 1?</h2>
The RBI&rsquo;s updated circular allows banks to hike charges for ATM usage beyond the free limit. The fee cap has increased from ₹21 to ₹23 per transaction (plus GST), applicable on both financial (like cash withdrawals) and non-financial (like balance checks or PIN changes) transactions. These new rates are applicable across all banks and ATM operators.
So whether you&rsquo;re pulling out cash for groceries or just checking your balance after online shopping, expect to pay ₹2 more per extra transaction if you&rsquo;ve crossed your monthly limit.
<h2>How many free ATM transactions do you still get?</h2>
While the charges have gone up, the RBI has not changed the number of free monthly transactions:
<ul>
<li>At your own bank&rsquo;s ATMs: 5 free transactions/month (both financial and non-financial).</li>
<li>At other banks&rsquo; ATMs:</li>
<ul>
<li>Metro cities: 3 free transactions/month.</li>
<li>Non-metro cities: 5 free transactions/month.</li>
</ul>
</ul>
These limits include both types of transactions.
<h2 class="x_elementToProof">Why have ATM charges been increased?</h2>
According to the RBI, the revision aims to align customer charges with rising costs&mdash;such as ATM security, cash handling, maintenance, and software upgrades. Banks and ATM operators have long been lobbying for a hike, citing higher operating expenses.
The move is also intended to promote digital payments, especially in rural and semi-urban areas where mobile-based and MicroATM services are gaining traction.
<h2 class="x_elementToProof">Banks have already notified customers &ndash; Here&rsquo;s what&rsquo;s changing</h2>
Several leading banks have revised their ATM fee structures effective May 1, 2025. This includes HDFC Bank, Punjab National Bank (PNB), IndusInd Bank, and Kotak Mahindra Bank. Customers at these banks will now pay more for both financial and non-financial ATM transactions once they exhaust their monthly free limits.
<ul>
<li>HDFC Bank has raised its post-limit fee from ₹21 to ₹23 (plus GST) for all transactions.</li>
<li>PNB will charge ₹23 for financial and ₹11 for non-financial transactions (earlier ₹21 and ₹10 respectively); changes come into effect from May 9.</li>
<li>IndusInd Bank has adopted a flat ₹23 (plus GST) fee beyond the free quota.</li>
<li>Kotak Mahindra Bank now charges ₹23 for financial transactions (up from ₹21) and ₹10 for non-financial ones (up from ₹8.5).</li>
</ul>
Meanwhile, State Bank of India (SBI) revised its ATM fee structure earlier this year on February 1, 2025. It also standardized free usage across metro and non-metro areas&mdash;5 free transactions at SBI ATMs and 10 at other bank ATMs for most customers. Beyond this:
<ul>
<li>Financial transactions cost ₹15 at SBI ATMs and ₹17 at other bank ATMs.</li>
<li>Non-financial transactions are free at SBI ATMs, but ₹10 per transaction at other banks&rsquo; ATMs.</li>
</ul>
&nbsp;
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<tbody>
<tr style="height: 54.3906px;">
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="x_elementToProof center" style="width: 109.688px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
Bank
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 242.766px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
Old Charges (Before May 1)
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 333.547px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
New Charges (Effective May 2025)
</td>
</tr>
<tr style="height: 54.3906px;">
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 109.688px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
HDFC Bank
</td>
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₹21 + GST (All transactions)
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 333.547px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹23 + GST (All transactions)
</td>
</tr>
<tr style="height: 54.3906px;">
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 109.688px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
PNB
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 242.766px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹21 (fin), ₹10 (non-fin) + GST
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 333.547px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹23 (fin), ₹11 (non-fin) + GST (Effective May 9)
</td>
</tr>
<tr style="height: 54.3906px;">
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 109.688px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
IndusInd Bank
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 242.766px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹21 + GST (All transactions)
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 333.547px; height: 54.3906px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹23 + GST (All transactions)
</td>
</tr>
<tr style="height: 76.7812px;">
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 109.688px; height: 76.7812px; border-width: 2px; border-color: rgb(0, 0, 0);">
Kotak Mahindra Bank
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 242.766px; height: 76.7812px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹21 (fin), ₹8.5 (non-fin)
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 333.547px; height: 76.7812px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹23 (fin), ₹10 (non-fin)
</td>
</tr>
<tr style="height: 99.7656px;">
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SBI (Revised Feb 1)
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 242.766px; height: 99.7656px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹15 (fin) SBI ATM, ₹17 (fin) other ATM, ₹0&ndash;₹10 (non-fin)
</td>
<td data-editing-info="{&quot;vAlignOverride&quot;:true}" class="center" style="width: 333.547px; height: 99.7656px; border-width: 2px; border-color: rgb(0, 0, 0);">
₹15 (SBI ATM), ₹17 (other bank ATM), ₹10 non-fin (other ATM)
</td>
</tr>
</tbody>
</table>
</figure>
&nbsp;
<h2>What&rsquo;s the interchange fee&mdash;and why it matters</h2>
The interchange fee is the charge your bank pays to the bank that owns the ATM you use. For instance, if you use an HDFC debit card at an SBI ATM, HDFC pays SBI. While customers don&rsquo;t pay this directly, it influences what banks charge after the free limit.
As of now, interchange fees remain unchanged:
<ul>
<li>₹17 for financial transactions</li>
<li>₹6 for non-financial transactions</li>
</ul>
However, this may be reviewed by ATM networks or the RBI in the future.
<h2 class="x_elementToProof">Are CRM machines affected too?</h2>
Yes, but with a catch. Cash deposits at Cash Recycler Machines (CRMs) remain free. However, if you withdraw money or check your balance at a CRM after crossing your free limit, the ₹23 + GST charge applies&mdash;just as it would at a regular ATM.

Business & Economy: Changes in ATM charges can lead to increased monthly expenses, and impacts one's overall budget management. Read more for more details.

Starting today, withdrawing cash from ATMs—or even just checking your balance—might cost you more. The Reserve Bank of India’s (RBI) revised guidelines have come into effect from May 1, 2025, increasing the maximum fees banks can charge customers once they exhaust their monthly quota of free ATM transactions. Whether it’s a cash withdrawal, PIN change, or mini statement, every extra swipe beyond your free limit could now pinch your pocket a bit harder. What’s changing from May 1? The RBI’s updated circular allows banks to hike charges for ATM usage beyond the free limit. The fee cap has increased from ₹21 to ₹23 per transaction (plus GST), applicable on both financial (like cash withdrawals) and non-financial (like balance checks or PIN changes) transactions. These new rates are applicable across all banks and ATM operators. So whether you’re pulling out cash for groceries or just checking your balance after online shopping, expect to pay ₹2 more per extra transaction if you’ve crossed your monthly limit. How many free ATM transactions do you still get? While the charges have gone up, the RBI has not changed the number of free monthly transactions: At your own bank’s ATMs: 5 free transactions/month (both financial and non-financial). At other banks’ ATMs: Metro cities: 3 free transactions/month. Non-metro cities: 5 free transactions/month. These limits include both types of transactions. Why have ATM charges been increased? According to the RBI, the revision aims to align customer charges with rising costs—such as ATM security, cash handling, maintenance, and software upgrades. Banks and ATM operators have long been lobbying for a hike, citing higher operating expenses. The move is also intended to promote digital payments, especially in rural and semi-urban areas where mobile-based and MicroATM services are gaining traction. Banks have already notified customers – Here’s what’s changing Several leading banks have revised their ATM fee structures effective May 1, 2025. This includes HDFC Bank, Punjab National Bank (PNB), IndusInd Bank, and Kotak Mahindra Bank. Customers at these banks will now pay more for both financial and non-financial ATM transactions once they exhaust their monthly free limits. HDFC Bank has raised its post-limit fee from ₹21 to ₹23 (plus GST) for all transactions. PNB will charge ₹23 for financial and ₹11 for non-financial transactions (earlier ₹21 and ₹10 respectively); changes come into effect from May 9. IndusInd Bank has adopted a flat ₹23 (plus GST) fee beyond the free quota. Kotak Mahindra Bank now charges ₹23 for financial transactions (up from ₹21) and ₹10 for non-financial ones (up from ₹8.5). Meanwhile, State Bank of India (SBI) revised its ATM fee structure earlier this year on February 1, 2025. It also standardized free usage across metro and non-metro areas—5 free transactions at SBI ATMs and 10 at other bank ATMs for most customers. Beyond this: Financial transactions cost ₹15 at SBI ATMs and ₹17 at other bank ATMs. Non-financial transactions are free at SBI ATMs, but ₹10 per transaction at other banks’ ATMs. Bank Old Charges (Before May 1) New Charges (Effective May 2025) HDFC Bank ₹21 + GST (All transactions) ₹23 + GST (All transactions) PNB ₹21 (fin), ₹10 (non-fin) + GST ₹23 (fin), ₹11 (non-fin) + GST (Effective May 9) IndusInd Bank ₹21 + GST (All transactions) ₹23 + GST (All transactions) Kotak Mahindra Bank ₹21 (fin), ₹8.5 (non-fin) ₹23 (fin), ₹10 (non-fin) SBI (Revised Feb 1) ₹15 (fin) SBI ATM, ₹17 (fin) other ATM, ₹0–₹10 (non-fin) ₹15 (SBI ATM), ₹17 (other bank ATM), ₹10 non-fin (other ATM) What’s the interchange fee—and why it matters The interchange fee is the charge your bank pays to the bank that owns the ATM you use. For instance, if you use an HDFC debit card at an SBI ATM, HDFC pays SBI. While customers don’t pay this directly, it influences what banks charge after the free limit. As of now, interchange fees remain unchanged: ₹17 for financial transactions ₹6 for non-financial transactions However, this may be reviewed by ATM networks or the RBI in the future. Are CRM machines affected too? Yes, but with a catch. Cash deposits at Cash Recycler Machines (CRMs) remain free. However, if you withdraw money or check your balance at a CRM after crossing your free limit, the ₹23 + GST charge applies—just as it would at a regular ATM.

ATM withdrawal just got costlier: What changes from May 1 and how it affects you

According to minutes of Reserve Bank of India's latest monetary policy meeting, policymakers sought to reduce borrowing costs to protect domestic demand from a potential slowdown caused by the hefty tariffs imposed by U President Donald Trump.&nbsp;
The RBI cut rates by 0.25 per cent and signalled a change in its policy stance to accommodative. That shift in the policy stance signals further rate cuts as the RBI is worried about growth.&nbsp;
The minutes outlined policymakers' focus on growth amid slowing inflation. That suggests more rate cuts in the coming months. Ratings agencies have already lowered India's growth outlook for this year.&nbsp;
<h2>Can RBI help sustain domestic consumption surge?&nbsp;</h2>
While the RBI's response is expected to keep India's status as the fastest-growing major economy intact, easing domestic demand is a cause for concern. The RBI minutes mirrored those concerns, with policymakers pledging to boost growth and demand.&nbsp;
While banks take time before passing on RBI rate cuts, the easing cycle will bring some Relief for Indians grappling with high interest rates on their loans.&nbsp;
The equated monthly instalments, or EMIs on home, car, and personal loans will eventually come down as banks start to cut lending rates.&nbsp;
But will this boost consumer demand? Or will growth take a significant hit from Trump's tariff rhetoric is to be seen.&nbsp;

Business Economy, While banks take time before passing on RBI rate cuts, the easing cycle will bring some Relief for Indians grappling with high interest rates.

According to minutes of Reserve Bank of India's latest monetary policy meeting, policymakers sought to reduce borrowing costs to protect domestic demand from a potential slowdown caused by the hefty tariffs imposed by U President Donald Trump. The RBI cut rates by 0.25 per cent and signalled a change in its policy stance to accommodative. That shift in the policy stance signals further rate cuts as the RBI is worried about growth. The minutes outlined policymakers' focus on growth amid slowing inflation. That suggests more rate cuts in the coming months. Ratings agencies have already lowered India's growth outlook for this year. Can RBI help sustain domestic consumption surge? While the RBI's response is expected to keep India's status as the fastest-growing major economy intact, easing domestic demand is a cause for concern. The RBI minutes mirrored those concerns, with policymakers pledging to boost growth and demand. While banks take time before passing on RBI rate cuts, the easing cycle will bring some Relief for Indians grappling with high interest rates on their loans. The equated monthly instalments, or EMIs on home, car, and personal loans will eventually come down as banks start to cut lending rates. But will this boost consumer demand? Or will growth take a significant hit from Trump's tariff rhetoric is to be seen.

RBI to cut borrowing costs further to protect domestic demand

According to minutes of Reserve Bank of india's latest monetary policy meeting, policymakers sought to reduce borrowing costs to protect domestic demand from a potential slowdown caused by the hefty tariffs imposed by U.S. President Donald Trump.

RBI To Cut Borrowing Costs Further To Protect Domestic Demand

In a move that was largely expected, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points bringing it down to 6%. This is the second rate cut in a row, signalling that the central bank is clearly prioritising economic momentum over inflation concerns. While this is great news for borrowers&mdash;home loans and EMIs are likely to get cheaper&mdash;it puts fixed deposit (FD) investors in a tight spot. With returns already low, this rate cut could squeeze them even further.
Let&rsquo;s unpack what this means for your savings and why it might be time to look beyond traditional FDs.
<h2>FD Rates Are Already Falling&mdash;And More Cuts Could Be Ahead</h2>
Soon after the announcement, several major banks moved quickly to reduce their FD interest rates. The drop is visible across short- and medium-term tenures, while long-term FD rates are still just about holding firm. But let&rsquo;s be honest&mdash;they won&rsquo;t stay there for long. Once banks fully absorb the repo cut, even those long-term rates will start drifting downward.
If you&rsquo;ve been sitting on the fence thinking the rates might bounce back, it&rsquo;s probably not happening anytime soon. This is the beginning of a softer interest rate cycle, and delaying FD investments could mean settling for much lower returns later.
<h2>Special FD Schemes? They&rsquo;re Being Quietly Discontinued</h2>
Remember those limited-period FD schemes offering 7.5% or even higher returns for senior citizens or specific durations like 444 or 999 days? Those were the golden tickets last year. But now, banks are quietly rolling them back. The special interest rates were introduced when deposit mobilisation was a challenge&mdash;but not anymore. With liquidity flush and rates trending down, banks simply don&rsquo;t need to offer those extra perks.
If you missed the bus on those schemes, don&rsquo;t wait for them to come back. Instead, you might want to secure what&rsquo;s still available before everything gets repriced lower.
<h2>Tax-Saving FDs Are Losing Their Edge</h2>
Five-year tax-saving FDs have long been a popular tool for conservative investors. You got tax benefits under Section 80C, and the returns, while modest, were predictable. But in the current scenario, they&rsquo;re becoming harder to justify. With interest rates slipping and the interest being fully taxable, the real returns after inflation and tax look less and less appealing.
It might be time to explore alternatives like ELSS mutual funds or PPF. Both offer tax benefits, and in the case of ELSS, potentially higher returns&mdash;albeit with some risk. For younger investors or those with longer time horizons, it&rsquo;s a trade-off worth considering.
<h2>Want Stability? Lock in Long-Term FD Rates Now</h2>
If you&rsquo;re still keen on FDs&mdash;and there&rsquo;s nothing wrong with that&mdash;then the smart move is to lock in long-term rates now. A few PSU and private banks are still offering decent returns for 3- to 5-year deposits. These rates may seem okay today, but in a few months, they might look fantastic in comparison.
This is especially relevant for retirees or anyone looking to lock in a predictable income stream. Don't wait for another rate cut and regret missing today&rsquo;s rates.
<h2>Non-Bank FDs Still Offer Higher Returns&mdash;With a Caveat</h2>
Here&rsquo;s where it gets interesting. While traditional banks are slashing rates, non-banking financial companies (NBFCs) and small finance banks are still offering 8%&ndash;9% on their FDs. Some of them even go a bit higher for senior citizens. If you're open to parking your money outside the typical big banks, these could be worth a look.
Of course, there's a bit more risk involved. So, make sure the institution is well-rated and regulated. Stick with NBFCs that have a proven track record and always keep your deposit size within the ₹5 lakh insurance limit for peace of mind.
<h2>Smaller Banks for Seniors? Yes, But Do Your Homework</h2>
Smaller banks and small finance banks often offer better interest rates than their bigger counterparts. For senior citizens especially, this can make a meaningful difference in monthly income. But how safe are these banks?
In most cases, they&rsquo;re perfectly safe&mdash;especially if they fall under RBI regulation and DICGC insurance coverage. Deposits up to ₹5 lakh per bank are protected. Still, it&rsquo;s wise to spread your money across a few institutions and not chase the absolute highest rate blindly. A balanced approach works best.
<h2>Don&rsquo;t Rely on FDs Alone</h2>
The RBI&rsquo;s rate cut is a wake-up call. The era of parking money in a single FD and forgetting about it for five years is fading fast. With inflation eating into your returns and bank rates heading lower, it&rsquo;s time to think broader.
Debt mutual funds, RBI Floating Rate Savings Bonds, senior citizen savings schemes, or even hybrid mutual funds are all worth exploring. If you&rsquo;re nearing retirement, a mixed portfolio can give you better stability, liquidity, and returns. And if you&rsquo;re younger, you&rsquo;ve got the time to take a bit more risk for potentially much higher rewards.
In conclusion, this repo rate cut might seem like just another policy tweak, but it could change how you save and invest. For fixed deposit investors, especially senior citizens and conservative savers, the message is clear: act fast or prepare for thinner returns. There&rsquo;s still time to lock into decent FD rates.

Business & Economy: The Reserve Bank of India (RBI) cut the repo rate by 25 basis points bringing it down to 6%. This is the second rate cut in a row, signalling that the central bank is clearly prioritising economic momentum over inflation concerns.

In a move that was largely expected, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points bringing it down to 6%. This is the second rate cut in a row, signalling that the central bank is clearly prioritising economic momentum over inflation concerns. While this is great news for borrowers—home loans and EMIs are likely to get cheaper—it puts fixed deposit (FD) investors in a tight spot. With returns already low, this rate cut could squeeze them even further. Let’s unpack what this means for your savings and why it might be time to look beyond traditional FDs. FD Rates Are Already Falling—And More Cuts Could Be Ahead Soon after the announcement, several major banks moved quickly to reduce their FD interest rates. The drop is visible across short- and medium-term tenures, while long-term FD rates are still just about holding firm. But let’s be honest—they won’t stay there for long. Once banks fully absorb the repo cut, even those long-term rates will start drifting downward. If you’ve been sitting on the fence thinking the rates might bounce back, it’s probably not happening anytime soon. This is the beginning of a softer interest rate cycle, and delaying FD investments could mean settling for much lower returns later. Special FD Schemes? They’re Being Quietly Discontinued Remember those limited-period FD schemes offering 7.5% or even higher returns for senior citizens or specific durations like 444 or 999 days? Those were the golden tickets last year. But now, banks are quietly rolling them back. The special interest rates were introduced when deposit mobilisation was a challenge—but not anymore. With liquidity flush and rates trending down, banks simply don’t need to offer those extra perks. If you missed the bus on those schemes, don’t wait for them to come back. Instead, you might want to secure what’s still available before everything gets repriced lower. Tax-Saving FDs Are Losing Their Edge Five-year tax-saving FDs have long been a popular tool for conservative investors. You got tax benefits under Section 80C, and the returns, while modest, were predictable. But in the current scenario, they’re becoming harder to justify. With interest rates slipping and the interest being fully taxable, the real returns after inflation and tax look less and less appealing. It might be time to explore alternatives like ELSS mutual funds or PPF. Both offer tax benefits, and in the case of ELSS, potentially higher returns—albeit with some risk. For younger investors or those with longer time horizons, it’s a trade-off worth considering. Want Stability? Lock in Long-Term FD Rates Now If you’re still keen on FDs—and there’s nothing wrong with that—then the smart move is to lock in long-term rates now. A few PSU and private banks are still offering decent returns for 3- to 5-year deposits. These rates may seem okay today, but in a few months, they might look fantastic in comparison. This is especially relevant for retirees or anyone looking to lock in a predictable income stream. Don't wait for another rate cut and regret missing today’s rates. Non-Bank FDs Still Offer Higher Returns—With a Caveat Here’s where it gets interesting. While traditional banks are slashing rates, non-banking financial companies (NBFCs) and small finance banks are still offering 8%–9% on their FDs. Some of them even go a bit higher for senior citizens. If you're open to parking your money outside the typical big banks, these could be worth a look. Of course, there's a bit more risk involved. So, make sure the institution is well-rated and regulated. Stick with NBFCs that have a proven track record and always keep your deposit size within the ₹5 lakh insurance limit for peace of mind. Smaller Banks for Seniors? Yes, But Do Your Homework Smaller banks and small finance banks often offer better interest rates than their bigger counterparts. For senior citizens especially, this can make a meaningful difference in monthly income. But how safe are these banks? In most cases, they’re perfectly safe—especially if they fall under RBI regulation and DICGC insurance coverage. Deposits up to ₹5 lakh per bank are protected. Still, it’s wise to spread your money across a few institutions and not chase the absolute highest rate blindly. A balanced approach works best. Don’t Rely on FDs Alone The RBI’s rate cut is a wake-up call. The era of parking money in a single FD and forgetting about it for five years is fading fast. With inflation eating into your returns and bank rates heading lower, it’s time to think broader. Debt mutual funds, RBI Floating Rate Savings Bonds, senior citizen savings schemes, or even hybrid mutual funds are all worth exploring. If you’re nearing retirement, a mixed portfolio can give you better stability, liquidity, and returns. And if you’re younger, you’ve got the time to take a bit more risk for potentially much higher rewards. In conclusion, this repo rate cut might seem like just another policy tweak, but it could change how you save and invest. For fixed deposit investors, especially senior citizens and conservative savers, the message is clear: act fast or prepare for thinner returns. There’s still time to lock into decent FD rates.

Repo Rate Hits 6%: What You Must Know Before FD Returns Shrink Further

India's central bank has cut interest rates by 0.25% amid a spate of downgrades to growth following Donald Trump's tariff announcements. The Reserve Bank of India (RBI) reduced repo rates from 6.25% to 6%, a second cut since February, when rates were brought down after nearly five years.

India cuts rates as Trump's tariffs put growth at risk

As India’s central bank gears up to announce its monetary policy, all eyes are on the impact of US import tariffs and the steps RBI Governor Sanjay Malhotra will take to bolster a slowing economy. With the US Set to impose tariffs of up to 26% on Indian exports, the RBI’s response to this challenge is crucial. Will the central bank’s actions trigger a positive market response or only deepen the global economic anxiety?

Can RBI help Indian stocks rebound?

As Trump’s new tariffs send shockwaves through Indian markets, all eyes are on the Reserve Bank of India’s upcoming monetary policy. Investors are anticipating a 0.25% rate cut in April, hoping it could cushion the economic impact and trigger growth.

India: RBI's key rate cut decision could boost markets

The Indian Rupee made a significant comeback to mark its best week in 19 months after falling to a record low. The currency was lifted by the central bank's heavy intervention in the foreign exchange market and kept speculators betting against the currency at bay.<o:p></o:p>
The&nbsp;Rupee&nbsp;closed out the week 0.1 per cent higher at 86.82 against the dollar. For the week, it gained 0.7 per cent, the most since mid-July of 2023. This comes after the currency fell to a new all-time low of 87.95 on Monday.<o:p></o:p>
Slowing economic growth in India, the Reserve Bank of India&rsquo;s (RBI) rate cut last week, foreign investor exodus from domestic stocks, and fears of a global trade war in response to Trump's tariff measures have put pressure on the&nbsp;Rupee.<o:p></o:p>
<h2 class="MsoNormal">Rupee&nbsp;recovers sharply from record low<o:p></o:p></h2>
After the currency fell to a new life low, the RBI sold dollars in the foreign exchange market on Monday, limiting the&nbsp;Rupee's decline.<o:p></o:p>
The central bank reportedly intervened significantly again on Tuesday. The&nbsp;Rupee&nbsp;is expected to trade within the 86.60 to 87.20 range in the near term. The RBI burning through its forex reserves has raised some concerns.<o:p></o:p>
However, analysts gave a thumbs up to the central bank for intervening to stabilise the currency. Broad expectations were that the rbi would start limiting its intervention and start building on the forex reserves.<o:p></o:p>
The latest data shows India&rsquo;s import cover risen for the third consecutive week after having fallen for four months. Before the current positive run, the country's forex reserves had fallen in 15 of the 16 weeks, hitting an about 11-month low.<o:p></o:p>
India's import cover has fallen about 65 billion dollars since hitting a record high of about 705 billion dollars in September. Currently, India&rsquo;s forex war chest is sufficient to cover about 11 months of projected imports.<o:p></o:p>
(With inputs from the agencies)<o:p></o:p>

Business & Economy: The Indian Rupee made a significant comeback to mark its best week in 19 months after falling to a record low. The Rupee closed out the week 0.1 per cent higher at 86.82 against the dollar.

The Indian Rupee made a significant comeback to mark its best week in 19 months after falling to a record low. The currency was lifted by the central bank's heavy intervention in the foreign exchange market and kept speculators betting against the currency at bay. The Rupee closed out the week 0.1 per cent higher at 86.82 against the dollar. For the week, it gained 0.7 per cent, the most since mid-July of 2023. This comes after the currency fell to a new all-time low of 87.95 on Monday. Slowing economic growth in India, the Reserve Bank of India’s (RBI) rate cut last week, foreign investor exodus from domestic stocks, and fears of a global trade war in response to Trump's tariff measures have put pressure on the Rupee. Rupee recovers sharply from record low After the currency fell to a new life low, the RBI sold dollars in the foreign exchange market on Monday, limiting the Rupee's decline. The central bank reportedly intervened significantly again on Tuesday. The Rupee is expected to trade within the 86.60 to 87.20 range in the near term. The RBI burning through its forex reserves has raised some concerns. However, analysts gave a thumbs up to the central bank for intervening to stabilise the currency. Broad expectations were that the rbi would start limiting its intervention and start building on the forex reserves. The latest data shows India’s import cover risen for the third consecutive week after having fallen for four months. Before the current positive run, the country's forex reserves had fallen in 15 of the 16 weeks, hitting an about 11-month low. India's import cover has fallen about 65 billion dollars since hitting a record high of about 705 billion dollars in September. Currently, India’s forex war chest is sufficient to cover about 11 months of projected imports. (With inputs from the agencies)

Indian Rupee marks best week in 19 months

The Indian rupee made a significant comeback to mark its best week in 19 months after falling to a record low. The currency was lifted by the central bank's heavy intervention in the foreign exchange market, keeping speculators betting against the rupee at bay. Watch in for more details!

Heavy RBI intervention helps record low rupee

The economic offences wing of the Mumbai police has arrested Hitesh Mehta, the former general manager and head of accounts at New India Cooperative Bank, in a 122 crore rupees embezzlement case. The arrest comes just days after the Reserve Bank of India imposed strict restrictions on the bank over financial irregularities.

New India cooperative bank under RBI lens

India's banking sector is facing fresh turbulence as the Reserve Bank of India has imposed strict restrictions on Mumbai-based New India Cooperative Bank due to liquidity concerns. Watch in for more details!

RBI imposes curbs on New India Co-Operative bank

Mumbai based co-op bank under RBI curbs: What it means for depositors

The Indian rupee has staged a remarkable comeback after hitting an all-time low, thanks to RBI’s strategic intervention. Despite global economic risks and stock market chaos, the currency’s rebound has surprised analysts and investors alike.

Rupee recovers amidst stock market chaos

Rupee stages its strongest comeback in nearly two years

The Indian rupee fell to a new low against the dollar on Thursday, and this is due to several factors, including a general negative sentiment towards the currency and increased demand for dollars. Watch in for more details!

Rupee set for volatile ride as RBI eases control amid dollar strength

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