RBI Keeps Repo Rate Unchanged at 5.25% in February 2026 MPC Review

The Reserve Bank of India on February 6 left the repo rate unchanged at 5.25% and retained a neutral policy stance following the conclusion of the Monetary Policy Committee’s February meeting, according to the RBI’s official monetary policy statement.

The decision comes after a 25 basis point rate cut in December, which took cumulative reductions since February 2025 to 125 basis points, as per RBI data. The standing deposit facility rate was kept at 5%, while the marginal standing facility rate and the bank rate remained unchanged at 5.50%, the central bank said.

Inflation, Growth, And Regulatory Measures

The RBI stated that Consumer Price Index-based inflation is projected at 2.1% for FY26, revised marginally higher from the earlier estimate of 2%, according to official projections. Inflation for the fourth quarter of FY26 is estimated at 3.2%, while projections for Q1 FY27 and Q2 FY27 stand at 4% and 4.2%, respectively. The central bank noted that full-year inflation projections for FY27 will be released in April 2026 after the new CPI series with a 2024 base year becomes effective from February 12.

On the growth front, the RBI revised its real GDP growth estimate for FY26 to 7.4% from 7.3%, citing updated macroeconomic assessments. Growth projections for Q1 FY27 and Q2 FY27 were raised to 6.9% and 7%, respectively, as per the RBI’s statement. The central bank said projections for full-year FY27 growth will be provided after the release of the new GDP series later in February.

The RBI also announced several regulatory measures affecting banks and non-banking financial companies. These include draft guidelines on loan recovery practices, mis-selling, and limiting customer liability in unauthorised electronic transactions. The RBI proposed a framework to compensate customers for losses in small-value digital fraud cases up to ₹25,000, according to the policy statement.

Further measures include raising the collateral-free loan limit for micro, small and medium enterprises to ₹20 lakh from ₹10 lakh, easing registration requirements for certain non-deposit-taking NBFCs with assets below ₹1,000 crore, and allowing banks to lend to real estate investment trusts under specified safeguards, the RBI said.

On liquidity management, the RBI reiterated its commitment to maintaining adequate system liquidity to support productive credit requirements and ensure smooth monetary policy transmission. The central bank said liquidity operations would account for fluctuations in government balances, currency in circulation, and foreign exchange interventions, according to the official statement.