RBI Holds Rates, Unleashes Reforms To Unlock Credit And Growth

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.5% following its three-day Monetary Policy Committee (MPC) meeting chaired by Governor Sanjay Malhotra. While the decision to maintain the status quo on interest rates reflects a cautious approach amid evolving inflation dynamics, the real headline lies in a series of structural and credit-related reforms aimed at making India's financial ecosystem more agile and growth-friendly. In an effort to boost exports and simplify foreign exchange processes, the RBI has extended the repatriation period for foreign currency held in IFSC units from one month to three months and lengthened the payment window for merchanting trade from four to six months.

- By: Shri K.K. Bajaj

The RBI has also taken a major step toward regulatory clarity by consolidating around 9,000 circulars into subject-wise documents across 11 types of regulated entities. This ambitious cleanup aims to reduce confusion and redundancy, and the draft documents will soon be open for public feedback. This initiative reflects a growing recognition that regulatory clutter can be as damaging to ease of doing business as policy uncertainty.