If you are waiting for your EMI to reduce after the recent RBI repo rate cut, this news is important.
On Tuesday, Reserve Bank Governor Sanjay Malhotra instructed banks, saying, “Immediately pass on the full benefit of the repo rate reductions to customers!”
Many banks, however, have not yet passed on the benefits of the RBI’s repo rate cuts to their loan customers, which has drawn the central bank’s displeasure.
Since February 2025, the RBI has cut the repo rate by 1.25% (125 basis points), bringing it down to 5.25%. Despite this, most banks continue to charge customers at old, higher interest rates.
Governor Malhotra summoned the MDs and CEOs of public sector and major private banks, emphasizing: “This money belongs to the public. Don’t delay, reduce EMIs!” The country’s GDP growth is also strong, running above 8%.
Making Banking Cheaper and Safer
The RBI Governor also highlighted improvements in the banking sector, including better financial health and reduced NPAs in 2025. However, he cautioned banks not to be careless.
He emphasized that banking should become cheaper through the increased use of technology, which will benefit small businesses and ordinary customers. Banks were also urged to:
Improve customer service and resolve complaints quickly.
Stay alert to rising digital fraud cases and strengthen security using intelligence-based tools.
Speed up processes like re-KYC and returning unclaimed deposits.
The RBI also stated that these meetings are regular, with the previous one held on January 27, 2025. Banks are under continuous scrutiny, and if interest rates do not decrease soon, stricter measures may be taken.
Significant reductions in home loan, car, and personal loan EMIs are expected by January 2026; otherwise, further action from RBI is likely.