October 4, 2016
The Reserve Bank of India in its monetary policy review today cut its key lending rate or repo rate by 25 basis points to nearly six-year low of 6.25 per cent, from 6.5 per cent. Banks are likely to pass on the RBI rate cut to customers.
Today's rate decision began a new era for the RBI, where the policy decision was made by a committee for the first time. Earlier, decisions were taken solely by the RBI governor.
It was also the first policy review under Governor Urjit Patel who last month replaced Raghuram Rajan. Dr Patel is joined by two Reserve Bank officials and three government nominated academics on the panel. The committee is bound by an inflation target of 4 per cent, plus or minus 2 percentage points as per its mandate, under the government's monetary policy framework agreement with the RBI.