Reserve Bank Of India / RBI may make a big announcement in October, will your loan burden reduce?

The Reserve Bank of India (RBI) will announce its monetary policy on October 1. According to an SBI report, a rate cut of 25 basis points is possible. With inflation under control, this move will support the economy. However, experts are divided, with some believing a "status quo" is likely.

Reserve Bank of India: The Reserve Bank of India (RBI) is scheduled to announce its next bi-monthly monetary policy on October 1, 2025. Meanwhile, a research report by the State Bank of India (SBI) has estimated that the RBI may cut rates by 25 basis points (0.25%). According to the report, retail inflation will remain under control, making this move likely to boost the economy.

RBI Meeting and Current Situation

The Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, will hold a three-day meeting starting September 28. This meeting comes amid rising global geopolitical tensions and the US imposing a 50% tariff on Indian exports. Amidst these circumstances, the RBI's final decision will be announced on October 1.

It is worth noting that since February 2025, the RBI has cut rates by a total of 100 basis points in three phases. However, in its August meeting, the RBI adopted a "wait and watch" approach and made no changes.

Expert Opinions

Experts are divided on this year's monetary policy.

Madan Sabnavis, Chief Economist at Bank of Baroda, says that inflation is already below the 4% target and economic growth is expected to exceed 6.5%. Therefore, a rate cut is not necessary now. However, future steps could be taken to maintain positive investor sentiment and stabilize bond yields.

Aditi Nair, Chief Economist at ICRA, believes that the recent GST rationalization may reduce inflation in October-November, but it may increase thereafter. Therefore, a status quo (no change) in October is more likely.

CRISIL Chief Economist Dharmakirti Joshi says that inflation is lower than expected and core inflation is at a historically low level. Changes in GST rates will also help reduce inflation. Furthermore, the recent 25 basis point rate cut by the US Federal Reserve and the possibility of further reductions in the future provide the RBI with policy flexibility.

Mandar Pitale of SBM Bank India estimates that the RBI may maintain a status quo for now and take a decision based on the circumstances at the December meeting.

Impact of GST Rationalization

The GST structure has been simplified, with a two-tier system implemented from September 22, 2025, with rates of only 5% and 18%. This new structure has been adopted by adjusting the previous rates of 5%, 12%, 18%, and 28%. This has made 99% of everyday commodities cheaper, which is expected to further control inflation. This move is not only a relief for consumers but also a favorable environment for the RBI's monetary policy.