The Reserve Bank of India’s Monetary Policy Committee (MPC) voted unanimously to maintain the benchmark repo rate at 5.5% in its 56th meeting held from August 4 to 6, 2025, amid a softening inflation outlook and resilient domestic growth. The central bank’s stance remains neutral, as the RBI awaits fuller transmission of its earlier cumulative 100 bps rate cuts delivered since February 2025.
The policy continuity is expected to support the momentum in India’s fintech and digital lending ecosystem, particularly with rising credit demand in consumer finance, MSME segments, and embedded finance solutions.
“Growth is robust and as per earlier projections though below our aspirations. The uncertainties of tariffs are still evolving. Monetary policy transmission is continuing. The impact of the 100 bps rate cuts since February 2025 on the economy is still unfolding,” the RBI noted.
RBI Governor Sanjay Malhotra, who chaired the meeting, said the MPC’s decision aligns with its objective of keeping inflation near the 4% target over the medium term while nurturing growth. The standing deposit facility (SDF) remains at 5.25% and the marginal standing facility (MSF) and bank rate at 5.75%.
While global growth continues to face headwinds from trade tensions and policy uncertainty, domestic indicators remain robust. The RBI noted strength in private consumption, especially rural demand, and fixed investment backed by high public capex. Services and construction activity also continue to drive economic momentum, although some softness persists in the industrial sector.
Real GDP growth for FY26 has been retained at 6.5%, with quarterly projections in the 6.3–6.7% range. Headline CPI inflation eased sharply to 2.1% in June 2025, its lowest level in over six years, due to a sharp decline in food prices. RBI now expects average inflation for FY26 at 3.1%, with a gradual rise above 4% from Q4 onwards.
For fintech lenders, the unchanged rate environment provides continuity for digital credit pricing models. With transmission of past rate cuts still ongoing, lending platforms, especially those integrated with UPI, BNPL, and embedded finance ecosystems, may see improved credit appetite and healthier portfolio performance.
The minutes of the MPC meeting will be released on August 20, with the next policy review scheduled for September 29 to October 1, 2025.
