RBI MPC Meeting 2026 LIVE: Repo Rate Held at 5.25% as Malhotra-Led MPC Retains Neutral Stance

12:37 PM IST: No Review of Bank Leadership Tenure Norms; GDP Risks Evenly Balanced

Malhotra said there is no proposal under consideration to review norms governing tenure limits for bank leadership. He described the 6.7% GDP growth estimate for the year as having risks evenly balanced on both sides. On UPI merchant discount rate (MDR), he said it would be premature to comment since the government is still evaluating potential amendments, though he stressed the importance of continued investment in the payments ecosystem through MDR or other channels. On liquidity, he said the current surplus is likely to be short-lived, with liquidity conditions expected to peak around September.

12:36 PM IST: Rationalisation, Not Overhaul, on Lending Benchmarks and NBFC Norms

Malhotra said upcoming draft guidelines involve no major change to NBFC capital or regulatory requirements. He said there is no major change planned to the external benchmark lending rate framework either, describing the coming changes as rationalisation rather than an overhaul, with a draft on interest rates on advances across regulated entities to follow. He said robust FCNR(B) inflows have further strengthened India's external position, including its balance of payments. On bulk deposit rate guidelines, he said these are not linked to pressure on banks' net interest margins but instead reflect the varying cost of deposits across customer segments.

12:35 PM IST: Rupee May Strengthen as Global Tensions Ease; No Plan to Close FCNR(B) Early

Malhotra said the rupee could strengthen as global tensions ease, citing strong underlying fundamentals in the Indian economy, and said the RBI would work to keep the currency's trajectory orderly and free of self-fulfilling expectations. He reiterated there is no proposal to prematurely close the FCNR(B) scheme, calling inflows into it robust and healthy. On inflation, he said food price and external shocks can be volatile and the RBI will act as and when required, reiterating that the central bank's mandate targets headline, not core, inflation, with the medium-term goal of aligning it to target. He described the current policy stance as neither dovish nor hawkish, calling the current rate appropriate.

12:31 PM IST: Bank IT Systems Robust, Under Regular Supervisory Review

Malhotra said IT systems at major banks and large regulated entities are strong and robust, backed by regular supervision beyond guidelines and regulations alone. He said any shortfalls or vulnerabilities identified through supervision are flagged, with follow-up measures suggested and monitored as new threats emerge, and said banks and regulated entities also continue strengthening their own systems.

12:22 PM IST: RBI Says Public Digital Infrastructure Should Keep Strengthening

Malhotra said there is shared intent to keep strengthening the country's public digital infrastructure, in response to a question on UPI.

12:13 PM IST: External Position Further Fortified; Rupee Interventions Limited to Curbing Volatility

Malhotra said India's external position was already strong and comfortable even before recent measures, which have further fortified it. He said RBI policy has consistently been to let markets determine the rupee's level within its band, without targeting a specific exchange rate, intervening only to curb excessive volatility or speculative pressure. He again said there is no proposal under consideration to prematurely close the capital inflow scheme, citing robust inflows and expectations of continued healthy flows.

12:01 PM IST: Post-Policy Press Conference Begins

The RBI's post-policy press conference got underway, with Governor Malhotra taking questions from reporters.

10:52 AM IST: Services Activity Slows Sharply to 53-Month Low

India's services sector activity eased to a 53-month low in July, with the reading coming in at 53.3 compared with 57.4 the previous month.

10:45 AM IST: 'Stable Rate Environment Likely to Reinforce Buyer Confidence,' Says Knight Frank

Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, welcomed the RBI's decision to hold rates, calling it a calibrated response to an environment where inflation is being driven mainly by supply-side and geopolitical factors. He said the move reflects the central bank balancing growth support against watchfulness on emerging risks, and that a stable rate backdrop should reinforce buyer confidence, give businesses and investors more certainty, and keep financing accessible. For real estate specifically, he expects the policy continuity to sustain housing demand and investment across both residential and commercial segments over the long run.

10:44 AM IST: 'Policy Tone Cautious Albeit Constructive,' Says Emkay Global

Madhavi Arora, Chief Economist at Emkay Global Financial Services, described the policy tone as cautious but constructive, weighing risks from the West Asia conflict, tighter global financial conditions and El Nino against the strength of domestic growth and healthy FCNR(B) inflows. She noted that although first-quarter inflation came in below the RBI's own forecast, the MPC has kept its guard up on El Nino-related risks, reiterating that any near-term price pressure would need to broaden into second-round effects before it warrants a policy response.

10:25 AM IST: Global Conditions 'Hostage' to West Asia Conflict, Governor Says

Governor Malhotra said global economic conditions and sentiment remain hostage to the rapidly shifting scale and intensity of the West Asia conflict, and said the RBI would continue to pursue policies aimed at further strengthening the domestic economy against that backdrop.

10:24 AM IST: Draft Guidelines Issued for UCB Licensing, Rural Cooperative Credit Monitoring

Malhotra said the RBI is issuing draft guidelines to resume licensing of urban cooperative banks, incorporating feedback received on an earlier discussion paper. The central bank is also releasing draft directions following a comprehensive review of the credit monitoring framework for rural cooperative banks, its first such revision since 2008. Separately, the RBI has proposed harmonising and standardising the regulatory framework governing interest rates on advances across all regulated entities.

10:21 AM IST: Banking, NBFC Metrics Healthy; Trade Deficit Widens, FDI Inflows Steady

Malhotra said capital adequacy, liquidity, asset quality and profitability across scheduled commercial banks remain healthy at the system level, though net interest margins have moderated somewhat from a year earlier. NBFC-level parameters were similarly described as sound, with adequate capitalisation, improved gross and net NPAs, and stronger profitability. He said India's current account deficit stayed modest last year despite a difficult global environment, and the country actually ran a current account surplus of $2.8 billion in April-May this year, helped by services trade and strong remittances. The merchandise trade deficit, however, widened to roughly $86 billion in the first quarter from about $69 billion a year earlier, driven mainly by crude oil, electronics and gold imports. Malhotra flagged slowing global trade growth, rising energy prices and continued trade policy uncertainty as upside risks to the current account deficit going forward, though he expects the India-UK trade deal, other recent trade agreements, and steady services exports and remittances to help offset some of that pressure. Gross FDI inflows held up at $30.7 billion in the first quarter.

10:16 AM IST: Monsoon Currency Return, Government Cash Drawdown Seen Aiding Liquidity

Malhotra said banking system liquidity should get support in the near term from the usual seasonal return of currency during the monsoon, a drawdown in government cash balances, and the RBI's own measures to draw in capital inflows. He added that core inflation excluding precious metals is projected to run below headline core inflation for now but should converge with it by the end of the financial year. He also noted that short-term money market rates, particularly on commercial papers and certificates of deposit, eased in July.

10:13 AM IST: Malhotra — Inflation Outlook Still Hazy, More Clarity Needed Before Acting

Governor Malhotra said headline inflation is set to move higher from here, driven largely by food and fuel on the supply side, even as core inflation stays contained and is expected to ease once it tops out in the third quarter. He described growth as resilient but said it would likely come in softer than last year. Malhotra flagged the Southwest monsoon, El Nino risk, and shifting geopolitical and trade dynamics as the main sources of uncertainty clouding the outlook, and said the MPC wants a clearer read on where inflation is headed, and what is driving it, before it moves on rates.

10:08 AM IST: Growth Holding Up, Governor Says, Even as Headline Inflation Ticks Up on Food and Fuel

Malhotra pointed to core inflation, stripped of precious metals, as having stayed benign for a while now, and said it should converge with headline core inflation by the end of the financial year. He reiterated that the projected rise in headline inflation traces back to food and fuel pressures rather than anything broader. On the growth side, he credited steady domestic demand, continued strength in manufacturing and services, and healthy export performance for keeping the economy on track.

10:03 AM IST: RBI Announces Repo Rate Held at 5.25%, Neutral Stance Retained

The RBI opened its policy statement by confirming the MPC's unanimous decision to keep the repo rate unchanged at 5.25%, maintaining its neutral stance for a second consecutive review.

9:55 AM IST: Q1 Inflation Came In Slightly Below Estimates, Governor Notes

Ahead of the formal rate announcement, early briefing notes indicated Malhotra would flag that actual inflation in the first quarter ran marginally under what the RBI had projected, a sign that cost pressures have only partially fed through so far. The recent uptick has been concentrated in food and fuel, with little sign yet of price pressure spreading more widely. The RBI expects headline inflation to climb further in the near term and peak in the third quarter of FY27 before starting to cool. Core inflation, excluding precious metals, remains benign and broadly tracking earlier estimates.

9:15 AM IST: Economists Watching for RBI Commentary on Forex Inflows Amid West Asia Tensions

Ahead of the announcement, economists had flagged that the central bank would likely use the policy statement to highlight the strength of foreign exchange inflows. Madhavi Arora, chief economist at Emkay Global, had said the RBI would probably strike a balance between caution on global developments and confidence in its targeted forex-inflow initiatives, which had pulled in close to $41 billion by the end of July. Separately, Sonal Badhan at Bank of Baroda had expected the central bank to keep emphasising vigilance given the ongoing uncertainty stemming from the conflict in West Asia.

8:30 AM IST: RBI Held Rates in June Too, Extending the Pause

Wednesday's decision follows the same script as the RBI's June review, when the MPC also opted to hold the repo rate at 5.25% and stuck with its neutral stance. At that meeting, held between June 3 and June 5, the central bank left the Standing Deposit Facility rate at 5%, and kept both the Marginal Standing Facility rate and the bank rate at 5.5%. Investors had gone into Wednesday's meeting watching for signs of whether the RBI would break from that pattern, or offer fresh guidance on inflation, liquidity, and growth given how much the global backdrop has shifted since June.

This is a developing story and will be updated as more details emerge

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