Repo Rate To Inflation Outlook: 5 Biggest Takeaways From RBI's Feb MPC Meet

Amid favourable global cues such as the inking of trade deals with both the EU and the US, the RBI Governor Sanjay Malhotra led RBI Monetary Policy Committee has kept interest rates changes and maintained a neutral policy stance.

This comes after the capex outlined in the Union Budget FY 2026-27 tabled on February 1 was proposed to be hiked by 9% to Rs 12.2 lakh crore. Let's have a look at the top five takeaways from Reserve Bank of India's MPC meet, which concluded on February 6.

Top 5 Takeaways From RBI's Feb MPC

Repo rate unaltered, policy stance 'neutral': India's apex bank maintained a neutral policy stance, while voting unanimously to keep repo rate at 5.25%.

Consequently, the standing deposit facility (SDF) rate, or the rate at which banks can now deposit extra money with the RBI stood at 5%. The rate at which banks can borrow money from the RBI in an emergency stands firm at 5.50% (this is called the MSF or marginal standing rate).

Inflation outlook: The RBI Governor Sanjay Malhotra noted that an uptick is projected in retail inflation, however, it might remain within its tolerance band of 2-6%.

The central bank projected Consumer Price Index (CPI)-based inflation for FY26 at 2.1% from 2% earlier. Inflation for Q4FY26 is expected at 3.2% from the earlier 2.9%. It might increase to 4% in Q1FY27, and for Q2FY27 to 4.2%.

Also Read: Is India in a Goldilocks Phase? RBI Governor Sanjay Malhotra Responds

“Proactive" on liquidity management: The RBI Governor said that the central bank will remain “proactive in liquidity management and ensure sufficient liquidity in the banking system to meet the productive requirements of the economy and to facilitate monetary policy transmission.”

Bank, NBFCs linked measures: For customer protection, the RBI will issue three draft guidelines on mis-selling, recovery of loans and engagement of recovery agents; and limiting the liability of customers in unauthorised electronic banking transactions.

"It is also proposed to introduce a framework to compensate customers up to an amount of ₹25,000 for loss incurred in small-value fraudulent transactions," said Malhotra.  

Meanwhile, RBI will publish a paper on possible measures to enhance the safety of digital payments. The RBI proposed increasing the limit for collateral-free loans to MSMEs from ₹10 lakh to ₹20 lakh.

"Liquidity management would be pre-emptive with sufficient allowance for unanticipated fluctuations in government balances, changes in currency in circulation, and forex intervention,' he said.

Growth outlook raised: RBI has altered its real GDP growth projections for FY26 and the first half of FY27 upwards. The apex bank in the South Asian country revised its growth outlook for FY26 to 7.4% from the earlier projection of 7.3%. RBI also noted that real GDP growth for Q1FY27 and Q2 to 6.9% (from 6.7% earlier) and 7% (from 6.8% earlier), respectively.

"We are deferring the projections for the full year to the April policy as the new GDP series will be released later in the month," said the central bank governor.