Issue: 1082
RESOLUTION
OF MONETARY POLICY COMMITTEE (MPC) DECEMBER 3 TO 5, 2025
The Monetary
Policy Committee (MPC) held its 58th meeting from December 3 to 5, 2025,
under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India
with the following outcomes;
·
Repo Rate
reduced by 25 bps to 5.25 per cent.
·
Consequently, the
SDF rate shall stand adjusted to 5.00 per cent and the MSF
rate and the Bank Rate to 5.50 per cent.
·
The MPC also
decided to continue with the neutral stance.
OUTLOOK
·
India’s GDP registered a six-quarter high growth of
8.2 per cent in Q2:2025-26, underpinned by resilient domestic demand.
·
On the supply
side, real gross value added (GVA) expanded by 8.1 per cent, aided by
buoyant industrial and services sectors.
·
Economic
activity during the first half of the financial year benefited from income tax
and GST rationalization, softer crude oil prices, front-loading of government
capital expenditure, and facilitative monetary and financial conditions
supported by benign inflation.
·
Real GDP
growth for 2025-26 is projected at 7.3 per cent, with Q3 at 7.0 per cent;
and Q4 at 6.5 per cent.
·
Real GDP growth
for Q1:2026-27 is projected at 6.7 per cent.
·
CPI inflation for 2025-26 is now
projected at 2.0 per cent with Q3 at 0.6 per cent; and Q4 at 2.9 per cent.
·
CPI inflation
for Q1:2026-27 and Q2 are projected at 3.9 per cent and 4.0 per cent,
respectively.
PUTIN’S VISIT TO INDIA
STRENGTHENS BILATERAL TIES WITH KEY AGREEMENTS ACROSS SECTORS: Russian President Vladimir
Putin's two-day visit to India has resulted in the signing of several important
agreements and memorandums, further strengthening the longstanding ties between
the two nations. The visit highlighted key areas of cooperation including
migration, health, maritime affairs, trade, and academic exchange, setting the
stage for a deeper, multifaceted partnership between India and Russia in the
years ahead. India and Russia signed agreements focusing on
temporary labour activity and combating irregular migration.
Health
& Food safety: The Ministry of Health and
Family Welfare of India and the Ministry of Health of Russia have agreed to
collaborate in healthcare, medical education, and scientific research.
Furthermore, an agreement between India’s Food Safety and Standards Authority
and Russia’s Federal Service for Surveillance on Consumer Rights Protection and
Human Well-being will focus on enhancing food safety.
Commerce: India
and Russia have also agreed to enhance customs and trade cooperation. India’s
Department of Posts has signed a bilateral agreement with JSC Russian Post to
improve postal services between the nations. The two leaders, in a joint
statement, stuck to the revised bilateral trade target of $100 billion by 2030,
up from $68.7 billion in FY25.
Education: A
Memorandum of Understanding between the Defence Institute of Advanced
Technology in Pune and Tomsk State University in Russia will enhance scientific
research. Additionally, a cooperation agreement between the University of
Mumbai, Lomonosov Moscow State University, and the Russian Direct Investment
Fund will foster academic exchange and mutual growth.
Media
collaboration:
Media collaboration has taken center stage with multiple MOUs between India’s
Prasar Bharati and various Russian media entities.
Visa
policy enhancements:
Both governments have agreed to grant a 30-day e-tourist visa on a gratis basis
to Russian nationals, on a reciprocal basis. Additionally, group tourist visas
will also be offered to Russian nationals free of charge.
Economy: Both countries committed to a
programme for the development of strategic areas of India-Russia economic
cooperation until 2030.
(Business Today)
Fitch ups India’s growth
forecast to 7.4%: With
July-September quarter (Q2 of FY26) beating all expectations, Fitch Ratings on
Thursday upped India’s growth forecast by 50 basis points (bps) to 7.4 per
cent. India recorded growth rate of 8.2 per cent during Q2. Post that, while
the government revised the forecast to 7 per cent or more for the entire
fiscal, SBI’s research report estimated growth rate at 7.6 per cent.
(Business Line)
India says IMF’s ‘C’ rating
on national accounts data due to old base year: Indian Finance Minister
Nirmala Sitharaman said the International Monetary Fund’s below par rating on
the country’s national accounts data was due to an outdated base year and not a
reflection of the quality of the statistics. In its country report on India
last week, the IMF assigned a ‘C’ rating to the South Asian nation’s national
accounts statistics, which includes data on gross domestic product, consumption
and income levels. The rating indicated the data have “some methodological
weaknesses” that “somewhat hamper surveillance,” the report said.
(Business Line)
Fino Payments
Bank becomes first to secure RBI nod for small finance bank conversion: Fino
Payments Bank has received in-principle approval from RBI to convert its
operations into a Small Finance Bank (SFB), becoming the first payments bank to
achieve this milestone. In addition to its core offerings, Fino
has already ventured into third-party lending by providing gold loans, housing
loans, and loans against property as part of a referral business model. These
verticals are expected to form the foundation for its new lending business once
the conversion is complete.
(Business Today)
RBI tweaks lending norms
after feedback from banks, NBFCs: RBI has extended restrictions
on lending against shares and to directors and relative of directors to non
banking finance companies (NBFCs), bringing them on par with banks. In the
final guidelines, RBI also allowed banks to have multiple entities to do the
lending business with the approval of the board. Regulated entities have to
implement the new rules by March 2028.
(Economic Times)
RBI asks banks to ringfence
non-core business: India's
central bank on Friday asked banks to submit a detailed plan on ringfencing
their core business from other riskier non-core business by March 2026. The
Reserve Bank of India said banks can have multiple entities in the lending
business, but with approval of the bank's board. Lenders have been asked to get
board approval and implement the new rules by March 31, 2028. The
change comes as a relief for banks, especially private ones, which would have
needed to spin off their lending subsidiaries. HDFC Bank and Axis Bank are
among lenders that have separate lending units. The RBI said on Friday that
banks will require a so-called no objection certificate for their overseas
branches to undertake businesses the parent is not allowed to operate.
(Economic Times)
Banks have to offer mobile
banking for basic accounts: RBI: Banks must offer mobile and
internet banking services even for basic savings accounts and cannot charge for
deposit of cash either at the bank branch or through channels, like ATMs or
business correspondents for these accounts, Reserve Bank of India (RBI) has
clarified in the amended directions on basic savings bank deposit (BSBD)
Accounts.
(Economic Times)
Unclaimed deposits in Oct
reduced by ?760 cr: RBI deputy guv S C Murmu: Unclaimed deposits in October
saw a reduction of around Rs 760 crore as a result of a government campaign and
incentives to banks RBI, Deputy Governor Shirish Chandra Murmu said during the
post-MPC press meet. In addition, in his MPC speech, RBI Governor also spoke of
the increase in grievances and pendency with the RBI Ombudsman and proposed a 2
onth campaign from January 1, 2026, to resolve all grievances pending for over
a month.
(Business Standard)
Retail CBDC transactions
hit 120 mn, value crosses ?28,000 crore: RBI DG: The volume of retail CBDC
(central bank digital currency) transactions has crossed 120 million, while the
total value has exceeded Rs 28,000 crore so far, Reserve Bank of India Deputy
Governor T Rabi Sankar said at the post-monetary policy press meet. He added
that progress on retail CBDC is broadly in line with expectations, with ongoing
work focused on programmability, coordination with state and central
governments, and specialised products for banks, along with efforts to enable
cross-border payments.
(Business Standard)
RBI's revised norms empower
cooperative banks with greater autonomy: RBI issued revised norms for
cooperative banks to help them expand credit outreach, leverage
technology-driven solutions, and support localised development priorities.
These revisions strike a balanced approach, empowering cooperative banks with
enhanced operational autonomy while embedding robust safeguards. The calibrated
relaxation of authorisation norms paves the way for cooperative banks to
contribute to India’s economic growth.
(Business Standard)
RBI orders weekly loan data
reporting to credit information cos from April 1, 2026: RBI has directed all regulated
lenders to provide information on their borrower accounts to credit information
companies on a weekly basis as against the current practice of 14 days. The
move will help in better underwriting of credit and monitoring of loans. This
directive will be effective April 1, 2026.
(Economic Times)
IFFCO-TOKIO GIC ties up
with cooperatives for micro insurance: IFFCO-TOKIO General Insurance
Company, which is celebrating the silver jubilee of its foundation, on Thursday
said it has tied up with a number of cooperatives to distribute micro insurance
for package policies. Established in 2000, IFFCO-TOKIO GIC is a 51:49 joint
venture between Indian Farmers Fertilizer Co-operative (IFFCO) and Japan-based
Tokio Marine Group. "While at the beginning we were guided by the
principal of affordable insurance, the vision has got enlarged to align with
people's aspirations and robust economy, while committed towards IRDAI's
'Insurance for All by 2047',"
(Business Line)
Russia's Gazprombank, Alfa
Bank seek RBI approval to set up India branches: Russian lenders Gazprombank
and Alfa Bank have sought clearance to begin operating in India, four people
familiar with the matter said, as Moscow pushes to grow trade with its top
seaborne oil customer. U.S. President Donald Trump has piled pressure on New
Delhi over its ties with Moscow as India and Russia aim for bilateral trade of
$100 billion by 2030, from $69 billion currently. Alfa Bank is Russia's largest
privately-owned lender and has been under Western sanctions since 2022.
(Business Standard)
Netflix agrees to buy
Warner Bros for $72 billion: Netflix
has agreed to buy Warner Bros Discovery's TV and film studios and streaming
division for $72 billion, a deal that would hand control of one of Hollywood's
most prized and oldest assets to the streaming pioneer that has upended the
media industry. The agreement - announced on Friday - follows a
weeks-long bidding war where Netflix seized the lead with a nearly $28-a-share
offer that eclipsed Paramount Skydance's nearly $24 bid for the whole of Warner
Bros Discovery, including the cable TV assets slated for a spinoff.
(Moneycontrol)
IndiGo cancels over 1,000
flights, CEO promises restoration by Dec 15: IndiGo CEO Pieter Elbers, in his first
statement since the crisis began, on Friday acknowledged the severe operational
disruptions affecting the airline over the past few days. He also revealed that
over 1,000 flights were cancelled on December 5 alone. Elbers confirmed that
the widespread cancellations had been caused by a major reboot of the airline’s
operational systems.
(Business Today)
NHAI gets SEBI nod for
Raajmarg InvIT, paving way for public investment in highways: SEBI has given an in-principle approval for
the registration of the Raajmarg Infra Investment Trust (RIIT) as a Public
Infrastructure Investment Trust. This marks an important milestone for the
National Highways Authority of India (NHAI) as it looks to expand its asset
monetisation strategy and tap into a wider pool of investors. A public InvIT allows
individuals and institutions to invest in infrastructure projects in a manner
similar to a mutual fund, but instead of equities, the investments are linked
to revenue-generating assets such as toll roads. The toll income from these
highways is then distributed to investors as returns. SEBI’s approval means
NHAI can begin preparing RIIT to eventually raise money from the public.
(Business Today)
Over 6,000 recognised startups have shut down so far, Govt tells
Rajya Sabha: 6,835 startups, out of the total recognised
startups, have been termed closed as of 31 October 2025, the government told
Rajya Sabha on Friday. The report also mentioned that, during the same period,
1,97,692 startups received the official startup recognition from DPIIT. The reply further categorised these shutdowns
on the basis of geography. Maharashtra saw the highest number of closures with
1,200. Karnataka saw 845 closures while Delhi witnessed 737. Furthermore, Uttar
Pradesh witnessed 598 shutdowns, Telangana saw 368, and Gujarat saw 348
closures.
(Financial Express)
India hosts first-ever Global South seminar on Public Financial
Management (PFM) in New Delhi: The Office of the Controller General of
Accounts of India (CGA), Ministry of Finance, in collaboration with the
Ministry of External Affairs (MEA), convened a high-level Seminar on sharing
India’s Public Financial Management (PFM) Experience for countries of the
Global South in New Delhi, today. The event brought together heads of Missions,
senior diplomats, and PFM experts from many partner countries of the Global
South, including Guyana, Cuba, Mauritius, Maldives, Timor-Leste, Fiji, etc,
many of whom are currently working with India through development cooperation
channels or Digital Public Infrastructure (DPI) partnerships.
(PiB)
Board approval must for bank entities to do same business, says
RBI: RBI on Friday allowed multiple entities in a
bank group to undertake the same business as long as they cater to different
client segments, while mandating board approval to ensure that any overlap in
business has proper rationale and justification. “To allow flexibility in the
manner in which a bank wishes to conduct its business, the suggestion has been
accepted. However, to ensure that the overlap in businesses undertaken by the
bank group has proper rationale/justification, board approval is being mandated,”
the central bank said on Friday.
(Business Standard)
GOLDILOCKS
MOMENT
§ A "Goldilocks moment" refers to an ideal
situation, especially in economics, that is "just right"—neither too
extreme nor too moderate—like the fairy tale where Goldilocks finds porridge
that's not too hot, not too cold, but perfect.
§
In
economics, it means a sweet spot of steady, moderate growth, low inflation, and
favorable interest rates, creating a stable environment for investment and
expansion, a period often sought after by businesses and investors.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI
REF. RATE)
INR /
1 USD : 90.2697
INR /
1 GBP : 119.5026
INR /
1 EUR : 105.1022
INR
/100 JPY: 58.0200
EQUITY INDEX
Sensex: 85712.37 (+447.05)
NIFTY: 26186.45 (+152.70)
Bnk
NIFTY: 59777.20 (+488.50)
Mahaparinirvan Diwas: December 6 is
celebrated as Mahaparinirvan Diwas in India to commemorate the death
anniversary of Dr. B.R. Ambedkar, the chief architect of the Indian
Constitution. The day honors his immense contributions as a social reformer,
economist, and for his lifelong advocacy for social justice, equality, and the
upliftment of marginalized communities.
Historical events: Globally, this
date commemorates the first pediatric heart transplant (1967), Finland's
declaration of independence (1917), and a devastating US coal mine disaster
(1907)..
****Have a nice Day****
Visit our website www.thebankingupdates.com
For Regular updates, Monthly e-magazines & Promotion
Study materials
CLICK HERE TO ENROLL THE BANK PROMOTION
EXTENSIVE MOCK TEST SERIES
Contact us: # 8261802533
email: admin@thebankingupdates.com