RBI Governor Sanjay Malhotra on Wednesday announced measures to improve the overall flow of credit in the banking sector for consumers. As part of the effort, the Reserve Bank has proposed removing “the regulatory ceiling on loans” against listed debt securities and raising the limits for lending by banks against equities by 5 times to Rs 1 crore.
RBI proposes to boost regulatory mechanism for lending against securities
Announcing the fourth bi-monthly monetary policy of the current fiscal, the RBI chief said it is proposed to “remove the regulatory ceiling on lending against listed debt securities” and “enhance limits for lending by banks against shares from Rs 20 lakh to Rs 1 crore and for IPO financing from Rs 10 lakh to Rs 25 lakh per person”.
This is part of five measures to improve flow of credit, said the RBI Governor.
The Governor also announced a package of 22 additional measures aimed at strengthening the resilience and competitiveness of the banking sector, improving the flow of credit, promoting ease of doing business, simplifying foreign exchange management, enhancing consumer satisfaction, and internationalisation of the Indian rupee.
The RBI chief further said that “these measures will help align our guidelines with international standards adapted to our national conditions and priorities, and strengthen the capital adequacy framework for banks and All India Financial Institutions (AIFIs)”.
RBI keeps repo rate unchanged
The central bank kept interest rates unchanged at 5.5% on Wednesday. The central bank maintained the status quo for the second consecutive time amid concerns over US tariffs and other geopolitical uncertainties.
RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged with a neutral stance.
He further said that GST rate rationalisation will have a sobering impact on consumption and growth, adding that tariff-related developments may slow down the economic expansion in H2 FY2025-26.
The Reserve Bank has cut the repo rate by 100 basis points since February 2025. From February to June 2025, there have been three rate cuts – 25 bps, 25 bps and 50 bps in June.
The central bank has been mandated to ensure that Consumer Price Index (CPI) based retail inflation is contained at 4% with a margin of 2% on either side.
In a relief for the RBI and the government, the retail inflation has been below 4% since February this year, easing to a six-year low of 2.07% in August.