Reserve Bank of India (RBI) slashed the repo rate by 25 bps and the reversed repo by 25 bps. This cut would be beneficial for new borrowers as banks are supposed to link all new floating rate loans to any of the four external benchmarks specified by the RBI from October 1.
This is the fifth consecutive rate cut by the apex bank this year, aggregating to 135 bps.
Policy rates
| Policy Repo Rate | 5.15% |
| Reverse Repo Rate | 4.90% |
| Marginal Standing Facility Rate | 5.40% |
| Bank Rate | 5.40% |
Increase of lending cap for Micro-finance institutions
The Reserve Bank of India has raised the lending cap for microfinance institutions to Rs 1.25 lakh, against the earlier limit of Rs 1 lakh, to improve credit availability in rural and semi-urban areas.Increase of household limit for borrowers of NBFC-Micro finance
It has also been decided to "increase the household income limit for borrowers of non-banking financial companies-micro finance institutions (NBFC-MFIs) from the current level of Rs 1 lakh for rural areas and Rs 1.60 lakh for urban/semi urban areas to Rs 1.25 lakh and Rs 2 lakh, respectively".NEFT will be available 24x7
The online money transfer through National Electronic Funds Transfer (NEFT) will be available 24x7 from now onwards.Presently, the facility is available till 7:45 pm on all working days except 2nd and 4th Saturdays of the month.
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