Between February and December 2025, the Reserve Bank authorities had reduced interest rates (repo rate) by 125 basis points (1.25%). Due to this, the majority of experts were not expecting another interest rate cut at Friday's monetary policy committee meeting. Walking the expected path, after the two-day meeting, Governor Sanjay Malhotra announced today that they are not reducing the repo rate for now. As a result, there is no immediate relief for the countrymen in home and car loan instalments at the beginning of the year.
Why repo rate matters to the common citizen
The 'gain' that the general public usually expects from Reserve Bank meetings revolves around the fluctuations of this repo rate. While no relief was provided in this regard today, Sanjay has walked the path of providing 'resolution' to the countrymen in a completely new direction. He announced that if any individual becomes a victim of cyber fraud in the future, compensation of up to ₹25,000 will be provided as a one-time payment.
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He said, "Surveys have shown that 65% of financial frauds in the country involve amounts less than ₹50,000. Therefore, in the future, even if there is any mistake on the customer's part, if they become victims of financial fraud, without any questions, they will be given 85% of the fraud amount or ₹25,000, whichever is less. However, this opportunity will be available only once in a lifetime. Many senior citizens are set to benefit significantly from this."
How the compensation mechanism will work
The Reserve Bank Governor also explained how this mechanism will work. He claims that by compensating for small losses in this way, the apex bank is working to increase customer awareness about financial fraud. The concerned individual will have to bear 15% of the loss. The bank through which the transaction occurred will bear 15%. The Reserve Bank authorities will cover the rest.
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Alongside this decision, the central bank has also announced that to increase cash supply in the economy, banks have been asked to increase financial assistance to the country's Real Estate Investment Trusts (REITs). Additionally, Sanjay announced today that the amount of collateral-free loans for business expansion of MSME sector companies will be increased from the current ₹10 lakh to ₹20 lakh.
