Bank Loan: Reserve Bank of India i.e. RBI has reduced the repo rate by 0.25% to 6%. Earlier it was 6.25%. That is, Bank loans may become cheaper in the coming days. At the same time, your EMI will also decrease.
RBI Governor Sanjay Malhotra gave information about the decisions of the first monetary policy committee meeting of RBI in the new financial year today on 9 April at 10 am. This meeting started on 7 April.
Bank Loan: In February this year, RBI had cut the repo rate by 0.25%
Earlier, in the last meeting of the financial year 2024-25, RBI had cut the interest rates by 0.25%. In the meeting held in February, the interest rates were reduced from 6.5% to 6.25%. This reduction was done by the Monetary Policy Committee after about 5 years.
What changes will come with the reduction of repo rate?
After the reduction in repo rate, banks can also reduce their interest rates on loans like housing and auto. If interest rates are low, housing demand will increase. More people will be able to invest in real estate. This will give a boost to the real estate sector.
What is repo rate, how does it make bank loans cheaper?
The interest rate at which RBI gives loans to banks is called repo rate. Due to the reduction in repo rate, the bank will get loan at lower interest. When banks get loans at cheaper rates, they often pass on the benefit to the customers. That is, banks also reduce their interest rates.
Why does the Reserve Bank increase and decrease the repo rate?
Any central bank has a powerful tool to fight inflation in the form of policy rate. When inflation is very high, the central bank tries to reduce the money flow in the economy by increasing the policy rate.
If the policy rate is high, the loan that banks get from the central bank will be expensive. In return, banks make loans expensive for their customers. This reduces the money flow in the economy. When money flow decreases, demand decreases and inflation decreases.
Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such a situation, the central bank reduces the policy rate. This makes the loan that banks get from the central bank cheaper and customers also get loans at a cheaper rate.
RBI Governor said 8 big things…
.The committee unanimously voted in favor of reducing the repo rate by 0.25% to 6%.
.The committee decided to change its stance from neutral to accommodative.
.Domestic growth will also be hampered due to the impact on global growth due to trade friction.
.Higher tariffs will have an impact on exports. There are signs of improvement in manufacturing activity.
.The fall in crude prices will help keep inflation under control.
.NPCI will be given the right to decide on the limit of consumer to merchant UPI transactions.
.At present, the limit for person-to-merchant payment is Rs 2 lakh.
.New guidelines will be issued regarding gold loan.
