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    Higher GDP, Lower Inflation To Liquidity Support: Major Highlights From December RBI MPC Meet

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    The Reserve Bank of India (RBI) on Friday announced its decision to cut the repo rate by 25 basis points (bps) by its six-member panel or its Monetary Policy Committee (MPC) after a three-day meeting which started on December 3 to conclude today.

    Here are some key highlights from central bank's Governor Sanjay Malhotra's address:

    Repo Rate

    • RBI MPC delivered a 25 bps rate cut, bringing the repo rate to 5.25 per cent, while maintaining a neutral stance.
    • SDF revised to 5 per cent.
    • MSF and Bank Rate adjusted to 5.5 per cent.

    GDP Growth Forecast

    • FY2025–26 growth outlook raised to 7.3 per cent, up from 6.8 per cent estimated in October.
    • RBI projects 6.7 per cent growth for Q1 FY27 and 6.8 per cent for Q2 FY27.
    • Services exports remain strong, merchandise exports face external headwinds, and overall growth is supported by robust domestic demand.

    Inflation

    • Headline inflation has fallen sharply and is expected to stay softer than earlier projections.
    • FY26 inflation forecast cut to 2 per cent (a 0.6-point downward revision).
    • Inflation for Q2 FY27 is projected at 4 per cent.
    • Malhotra noted that Q2 FY26 inflation averaged 1.7 per cent, breaching the 2 per cent lower tolerance band, and dropped further to 0.3 per cent in October 2025, even as GDP growth hit 8.2 per cent.
    • Improved food supplies, strong reservoir levels, favourable soil moisture and easing global commodity prices are aiding disinflation.

    RBI's Liquidity Push

    • RBI to undertake Rs 1 lakh crore OMO purchases and a $5 billion, three-year buy–sell swap in December to bolster durable liquidity.
    • Policy stance remains neutral.

    RBI's Focus On Consumers

    • Surge in customer complaints has increased pendency with the RBI Ombudsman.
    • Malhotra urged regulated entities to prioritise customer-centric practices and reduce grievances.
    • A two-month campaign from 1 January aims to clear all Ombudsman cases pending for over a month.

    Bank Credit Rises

    • Bank credit has accelerated, supported by strong lending to retail and services sectors.
    • Credit to MSMEs remains buoyant, and large industries have also seen improved credit offtake.

    RBI KYC Drive

    • RBI has intensified customer service initiatives, including Re-KYC drives, financial inclusion measures, and the “Aapki Poonji, Aapka Adhikar” campaign.
    • The Citizens Charter was reviewed earlier this year to improve service standards.
    • All applications for RBI services are now fully online.
    • Monthly disclosures of disposal and pendency data are published on the 1st of every month, with over 99.8 per cent of applications resolved within stipulated timelines.
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