Reserve Bank of India’s Monetary Policy Committee kept the repo rate unchanged at 5.25% in its August 2026 meeting. The Standing Deposit Facility remains at 5% while the Marginal Standing Facility and Bank Rate stand at 5.50%. The committee maintained a neutral stance, balancing inflation control with growth support.
Consumer price inflation for FY27 has been revised to 5% from 5.1% earlier. Quarterly projections show 4.7% in the second quarter, 5.9% in the third quarter, 5.5% in the fourth quarter and 5.3% in the first quarter of FY28. Core inflation is expected to average 4.3%.
Gross domestic product growth for FY27 has been raised to 6.7% from 6.6%. Quarterly growth is projected at 7% in the first quarter, 6.4% in the second quarter, 6.5% in the third quarter and 6.8% in the fourth quarter. The first quarter of FY28 is expected to deliver 7.3% growth.
The banking sector remains strong in capital adequacy, liquidity, asset quality and profitability though net interest margins have moderated. Non banking financial companies also reported healthy capital positions and improved asset quality.
Foreign capital inflows strengthened with gross FDI rising to 30.7 billion dollars in the first quarter of FY27 compared with 26.7 billion dollars last year. Net FDI inflows improved while foreign portfolio investments turned positive with 7.1 billion dollars in June and July 2026.
The RBI also proposed draft guidelines for licensing urban cooperative banks and revising credit monitoring arrangements for rural cooperative banks. It plans to harmonise interest rate frameworks across regulated entities to improve transparency and consumer protection.
