Key Points
- RBI cuts repo rate by 0.50% to 5.5%, third consecutive reduction in 2025.
- Silver prices in Delhi surge by ₹3,000/kg, hitting a new record of ₹1,07,200/kg.
- 24K gold at ₹99,780/10g, 22K gold at ₹91,480/10g.
- RBI raises gold loan LTV ratio to 85% for loans up to ₹2.5 lakh, easing access for small borrowers.
- No credit appraisal required for gold loans up to ₹2.5 lakh.
New Delhi: The Reserve Bank of India (RBI) has cut the repo rate by 50 basis points to 5.5% in its latest Monetary Policy Committee (MPC) meeting, marking the third consecutive reduction this year. This move, led by RBI Governor Sanjay Malhotra, aims to stimulate economic growth as inflation continues to drop, with the Consumer Price Index (CPI) now forecasted at 3.7% for FY26. The central bank also reduced the Cash Reserve Ratio (CRR) by 100 basis points to 3%, infusing ₹2.5 lakh crore in additional liquidity into the banking system.
Impact on Borrowers and Savers
- Borrowers: The repo rate cut will make loans especially home, auto, and gold loans cheaper, reducing EMIs and boosting consumer spending.
- Savers: Conversely, depositors may see lower returns on fixed deposits and savings accounts as banks adjust interest rates downward.
The RBI’s policy stance has shifted from ‘accommodative’ to ‘neutral’, indicating that future rate changes will be data-dependent and focused on sustaining growth. The GDP growth forecast remains at 6.5% for the current fiscal, despite global uncertainties.
Silver Prices Rocket to All-Time High in Delhi
Following the RBI’s announcements and increased local demand, silver prices in Delhi soared by ₹3,000 per kg, reaching a record ₹1,07,200 per kg. This marks a 7% rise in just one week, with traders attributing the spike to both domestic and global market factors. The Multi Commodity Exchange (MCX) also saw September silver contracts hit ₹1,07,130 per kg, reflecting heightened speculative activity.
Gold Prices Remain Elevated
- 24K Gold: ₹99,780 per 10 grams.
- 22K Gold: ₹91,480 per 10 grams.
Gold prices have remained high, supported by strong investment demand and global economic uncertainty.
RBI Eases Gold Loan Rules: More Relief for Small Borrowers
In a significant move for households and small businesses, the RBI has raised the loan-to-value (LTV) ratio for gold loans up to ₹2.5 lakh from 75% to 85% (including interest). This means that for gold worth ₹1 lakh, borrowers can now get up to ₹85,000 as a loan, compared to ₹75,000 earlier.
Additional Reliefs:
- No credit appraisal required for gold loans up to ₹2.5 lakh, simplifying the process for small-ticket borrowers.
- End-use monitoring is now only mandatory for loans under Priority Sector Lending norms.
RBI’s new rules are designed to make credit more accessible and reduce procedural burdens, especially for lower-income groups who rely on gold loans for urgent needs.
The RBI’s aggressive 0.50% repo rate cut and relaxed gold loan rules aim to boost economic growth and ease credit for small borrowers. Meanwhile, Delhi’s silver prices have hit historic highs, and gold remains expensive, reflecting both local and global market dynamics.
