RBI Cuts Repo Rate To 5.25%: Cheaper Loans, Lower EMIs, Mixed Impact For Savers
RBI Cuts Repo Rate: Key Highlights
The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points to 5.25%, as announced by Governor Sanjay Malhotra on December 5, 2025. The move aims to make borrowing cheaper for individuals and businesses, while signaling the RBI’s continued “neutral” stance for future adjustments based on economic conditions.
Explore the RBI rate cut impact through visuals! From home loans and EMIs to fixed deposits and economic outlooks, our photogallery captures how this monetary move affects borrowers, savers, and the broader economy.
(Disclaimer: Images are AI Generated, And infomration is sourced from public platforms)
Repo Rate Details
-New Repo Rate: 5.25%
-Previous Repo Rate: 5.50%
-Monetary Policy Stance: Neutral
-Economic Outlook: GDP growth forecast for FY26 raised to 7.3%; CPI inflation lowered to 2%.
Impact on Home and Personal Loans
The rate cut benefits borrowers significantly, reducing EMIs for floating-rate loans. For instance, a 25 bps reduction on a ₹60-lakh home loan could save ₹900–₹1,200 per month. Cheaper loans improve affordability, especially in mid-income and affordable housing segments.
Actions for Borrowers
Existing borrowers should contact their banks to confirm revised interest rates and see if EMIs or loan tenure adjustments apply. Prospective borrowers may find lower initial interest rates encouraging, potentially prompting new loan applications.
Impact on Savers
Interest rates on fixed deposits (FDs) typically adjust downward after repo rate cuts. As banks’ funding costs decrease, new FD rates may drop, protecting bank margins.
Actions for Savers
Individuals planning to open new FDs should act promptly to lock in current higher rates before banks reduce interest payouts.
