RBI Keeps Repo Rate Steady, Unveils Major Reforms to Boost Business and Lending

The Reserve Bank of India (RBI) has announced a series of sweeping reforms aimed at making business operations smoother and improving access to credit, while also keeping the repo rate unchanged at 5.5% after its three-day Monetary Policy Committee (MPC) meeting chaired by Governor Sanjay Malhotra.

The central bank’s latest measures are designed to benefit businesses, exporters, banks, and infrastructure developers, signalling a push towards easing credit flow and cutting bureaucratic hurdles.

Key Reforms for Businesses

1. Greater Flexibility in Bank Accounts
Banks will soon get more freedom in opening and managing current accounts and CC/OD accounts for borrowers, especially those regulated by other financial bodies. The RBI may also lift limits on collection accounts, a move expected to reduce friction for businesses.

2. Boost for Exporters
To ease foreign trade, the RBI has extended the time limit for exporters to repatriate money from foreign currency accounts in IFSC units from one month to three months.

For merchanting trade, the payment window has been widened from four months to six months.
Processes for clearing pending entries on the EDPMS and IDPMS portals will also be streamlined.

3. Simplification of Rules

In a move to cut red tape, the RBI has consolidated nearly 9,000 circulars and directions into subject-wise documents covering 11 categories of regulated entities. Drafts of these simplified rulebooks will be released for public consultation.

Lending Reforms: More Freedom and Flexibility

1. Financing Corporate Acquisitions
Banks will soon have a proper framework to fund corporate acquisitions, helping Indian companies expand through mergers and takeovers.

2. Higher Lending Limits Against Securities

Lending limits against listed debt securities will be lifted.
Loans against shares will increase from ₹20 lakh to ₹1 crore.
IPO financing limits will rise from ₹10 lakh to ₹25 lakh.

3. Scrapping Outdated Restrictions
The RBI has withdrawn a 2016 restriction that discouraged banks from lending to very large borrowers with credit requirements of ₹10,000 crore or more. The regulator said system-wide risks will now be managed through broader tools rather than micro-restrictions.

4. Cheaper Infrastructure Loans via NBFCs
To lower borrowing costs for infrastructure projects, the RBI will reduce the risk weights on NBFC lending for high-quality, operational infrastructure. This is expected to make long-term project financing more affordable.

5. New Licences for Urban Co-operative Banks
After nearly two decades, the RBI is reopening the door for new urban co-operative banks, with a discussion paper to be released soon. Licensing for these institutions had been on hold since 2004.

What It Means

By holding the repo rate steady, the RBI has chosen to prioritise financial stability while simultaneously introducing pro-growth reforms. The measures will:

Ease business operations and cut regulatory clutter.
Provide exporters with more breathing space.
Allow banks greater flexibility to lend.
Lower infrastructure funding costs.
Reopen opportunities for co-operative banking.
According to Aditi Singh, Chief Strategy Officer at Satin Creditcare, “Stable borrowing costs translate into greater confidence for NBFCs to pursue growth opportunities, particularly in high-demand segments. The RBI’s focus on liquidity and operational resilience reflects a commitment to sustainable credit expansion.”
Overall, the reforms signal the RBI’s intent to balance stability with growth, encouraging investment, exports, and credit flow in India’s evolving economy.