The Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 5.25%, inline with expectations. However, that’s hardly what made headlines. Towards the end of the press meet, the RBI Governor started detailing out key proposals for the banking sector and that’s what made everyone sit up and pay attention
Governor Malhotra proposed key measures and proposals aimed at promoting ease of doing business for NBFCs, support MSMEs and enhance customer protection.
Here are 5 key must know details from the RBI MPC meet that you need to know –
#1. RBI eases registration, branch norms for select NBFCs
The Reserve Bank of India has proposed regulatory relief for certain NBFCs that do not avail public funds, have no customer interface, and have assets up to Rs 1,000 crore from mandatory registration.
The central bank also plans to ease branch expansion norms for NBFC-Investment and Credit Companies engaged in gold-loan business by removing the requirement of prior RBI approval for opening new branches even if they operate more than 1,000 branches.
#2. RBI proposes upto Rs 25,000 compensation for small-value digital frauds
Keeping in mind the growing menace of cyber fraud, the RBI proposed a framework to compensate customers up to Rs 25,000 or 85% of the total amount for losses arising from small-value fraudulent transactions.
The RBI Governor clarifies that the proposed compensation will be a one-time relief and will be applicable even if the OTP has been shared by a customer.
“As long as (the customers) are defrauded whether on their own accord or anyone else’s accord, no questions asked… we will compensate them as long as it is unintended,” Malhotra said in the press conference after the Policy announcement.
The RBI said that it will issue three draft guidelines, focusing on mis-selling, recovery of loans and the engagement of recovery agents, and limiting customer liability in unauthorised electronic banking transactions.
It will also publish a discussion paper on measures to enhance the safety of digital payments, including options such as lagged credits and additional authentication for specific user groups like senior citizens.
#3. RBI proposes to raise collateral-free MSME loan cap to Rs 20 lakh
For the MSME sector, RBI proposed to double the limit for collateral-free loans to Rs 20 lakh from the existing Rs 10 lakh.
It also said banks would be allowed to lend to real estate investment trusts, subject to prudential safeguards, extending a facility already available to infrastructure investment trusts.
“Upon review and considering the presence of strong regulatory and governance framework for listed REITs, it is proposed to permit commercial banks to extend finance to REITs, subject to appropriate prudential safeguards,” RBI Governor said.
“The existing guidelines in respect of lending to InvITs are also being harmonised for parity with prudential safeguards proposed for lending to REITs,” he added.
#4. RBI holds repo rate at 5.25%, maintains neutral stance
RBI kept the policy repo rate unchanged at 5.25% and continue with a neutral policy stance.
The standing deposit facility (SDF) rate remains at 5.00%, while the marginal standing facility (MSF) rate and the Bank Rate stay at 5.50%.
CPI inflation for the FY26 is now projected at 2.1%, with Q4FY26 inflation at 3.2%.
On the growth front, real GDP growth for FY26 is estimated at 7.4% but revised Q1FY27 GDP growth to 6.9% and Q2 FY27 to 7.0%.
RBI noted that Foreign exchange reserves stood at $ 723.8 billion as of January 30, 2026.
#5. Trade agreements to aid long-term growth
In his statement, RBI Governor Sanjay Malhotra said the Indian economy remains in a “good spot” despite heightened geopolitical tensions and global trade uncertainty.
He noted that recent trade agreements, including the India-EU deal and a prospective India-US trade agreement, are expected to support growth over a longer period.