Everything You Need to Know About Deposits

As the Reserve Bank of India’s Monetary Policy Committee (MPC) concluded its meeting on June 6, 2025, the central bank delivered a widely watched policy move: a 50 basis point cut in the repo rate, bringing it down to 5.50%. This marks the third consecutive reduction this year, underscoring the RBI’s intent to support economic growth amid a backdrop of subdued inflation and persistent global uncertainties

The repo rate in India is a reflection of the country's evolving economic strategies and monetary policy adjustments over time. Between 2010 and 2025, repo rate trends have mirrored the broader shifts in inflation control, global economic pressures, and domestic financial stability measures.

In this blog, we explore the repo rate changes during this 15-year period, offering a detailed look into how India’s financial framework has responded to various economic stimuli.

The repo rate is a key tool used by the Reserve Bank of India (RBI) to manage the country’s economy. It is the interest rate at which the RBI lends money to commercial banks, affecting how much it costs for banks to borrow and lend money. By changing the repo rate, the RBI controls inflation, regulates the money supply and supports economic growth. Understanding how the repo rate works helps explain its wider impact on the economy through the monetary policy transmission process.

The Reserve Bank of India (RBI)’s, April 2025 Monetary Policy Statement projected inflation easing to 3.2% (well within the 4% target) and signaled continued accommodative policy to support growth, implying further deposit rate softening in coming quarters.

In India’s evolving financial landscape, the Reserve Bank of India’s repo rate serves as a pivotal benchmark, subtly influencing the cost of funds and shaping the broader investment environment. While its impact on retail loan EMIs is well known, the indirect effects on non-banking financial companies (NBFCs) and fixed deposit (FD) rates warrant closer examination, especially for discerning investors. But how exactly does this mechanism work? And why do monthly outgoings fluctuate with announcements from the Reserve Bank of India (RBI)?

The repo rate in India serves as a crucial indicator of monetary policy direction. From influencing borrowing decisions to reshaping business loan structures, every change in the repo rate creates a ripple effect across the economy. For business owners and financial decision-makers, understanding how a change in the repo rate directly impacts EMIs and the cost of borrowing is as essential as it is useful.

The Reserve Bank of India’s (RBI) repo rate remains central to how it shapes the country’s monetary policy framework, directly influencing borrowing costs, liquidity, inflation, and economic growth. As India navigates a complex global economic environment in 2025, the RBI’s Monetary Policy Committee (MPC) has adopted an accommodative stance by demonstrating a clear shift towards easing to strategically sustain growth while keeping inflation in check.

As the Reserve Bank of India (RBI) and other central banks navigate an increasingly complex global landscape, investors, economists, and policymakers are keenly awaiting potential repo rate adjustments. With the MPC meeting between June 4-6, 2025, all eyes are on whether it will deliver a third consecutive repo rate cut, the implications extend far beyond domestic markets.

The term 'basis points' frequently appears in financial discussions, especially around policy announcements, yet it often feels abstract rather than something that influences your EMIs or savings returns. And now with the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) convening between June 4-6, 2025, all eyes are peeled for a third potential repo rate cut. The consensus points towards a 25 basis point cut, though a larger cut might also be possible.

When the Reserve Bank of India (RBI) changes the repo rate (the rate at which it lends money to financial institutions), it sends a strong signal about the direction of the economy. A rate cut typically aims to lower borrowing costs and encourage spending, while a rate increase seeks to rein in inflation by making loans more expensive.