The Monetary Policy Committee of the Reserve Bank of India is expected to keep the repo rate unchanged and maintain a neutral policy stance in its latest bi-monthly review, according to Nuvama Research.

The three-day meeting of the MPC started on Wednesday. The policy outcome is scheduled to be announced on Friday by RBI Governor Sanjay Malhotra. 

In its December monetary policy meeting, the six-member committee of the RBI reduced the repo rate by 25 basis points to 5.25%. This brought the cumulative cuts to 125 basis points in 2025.

According to Nuvama Research, the central bank is expected to keep the key lending rates unchanged after cumulative easing of 125 basis points from its peak, bringing the policy repo rate down to 5.25%.

Further, the report highlights that transmission of the past rate cuts to bank lending rates is still underway, while bond yields continue to remain relatively sticky. Under this, the central bank is expected to remain focused on liquidity management, ANI reported, citing Nuvama Research.

“In the forthcoming MPC review, we reckon the RBI shall maintain status quo after cumulative easing of 125bp, bringing the repo rate to 5.25 per cent,” the Nuvama Research report said.

Also, Nuvama outlined that the recent trade deal between India and the US might help support foreign capital flows and the Indian rupee, giving the RBI leeway to manage domestic liquidity.

The report mentioned that the Indian economy seems to be bottoming out on the macroeconomic front, though the recovery is yet to become broad-based. Highlighting that growth conditions remain uneven across different sectors, the report points towards the global uncertainty, with elevated levels of market volatility.

Taking all these factors into consideration, the RBI might take a cautious, wait-and-watch approach in the near term, with the policy decisions to remain guided by evolving domestic and global conditions, the report added.

In its recent report, the Yes Bank said there is “little reason” for the RBI to move in with further cuts, with inflation likely to move higher.

“We think we have seen the last of the rate cuts in this cycle and should expect a long pause (difficult to determine the length of the pause), unless growth tends to underperform (not our base case),” said the Yes Bank report.

The Centre expects Rs 3.16 lakh crore in dividends and surpluses from the Reserve Bank of India, nationalised banks, and financial institutions in 2026-27, up about 3.75 per cent over the current fiscal.

During the current fiscal year, as per the Revised Estimate (RE) presented in Parliament, the central government is expected to get about Rs 3.05 lakh crore, significantly higher than Rs 2.56 lakh crore estimated in the February 2025 Budget.

Budget documents further showed that dividends from public sector enterprises and other investments are estimated at Rs 75,000 crore, up from Rs 71,000 crore in the current fiscal.

Dividend and Reserve Bank’s surplus transfers fall under the non-tax revenue category.

In all, the Centre expects Rs 6.66 lakh crore as non-tax revenue next fiscal, lower than 6.67 lakh crore in 2025-26.

The revenue from taxes has been pegged at Rs 28.66 lakh crore, up 7.18 per cent from Rs 26.74 lakh crore in 2025-26.

ALSO READ: Budget 2026: The Angel Is In The Details — Editor’s Take

Four major banks including RBL Bank, have approached the Central Information Commission (CIC) objecting to the disclosure of information such as the list of defaulters and non-performing assets, penalties and inspection reports even as the Reserve Bank of India (RBI) termed the records “liable to be disclosed” under the Right to Information (RTI) Act.
| Photo Credit: Reuters

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Stock market benchmark indices Sensex and Nifty rallied on Friday (December 5, 2025) after the Reserve Bank of India (RBI) cut key benchmark interest rate for the first time in six months and took steps to boost liquidity to support a “goldilocks” economy in the face of high US tariffs.

Rising for the second day in a row, the 30-share BSE Sensex advanced 447.05 points, or 0.52%, to settle at 85,712.37. During the day, it jumped 531.4 points, or 0.62%, to 85,796.72.

The 50-share NSE Nifty climbed 152.70 points, or 0.59%, to 26,186.45.

The six-member monetary policy committee, led by RBI Governor Sanjay Malhotra, voted unanimously to lower the repurchase or repo rate by 25 basis points to 5.25% and retained a neutral stance, which give room for further rate cuts.

In doing so, the RBI seems to have shrugged off concerns over fall in the rupee, which breached 90 to a dollar this week.

The RBI lowered its inflation forecast for the fiscal year through March to 2% from 2.6%, while raising its GDP growth projection to 7.3%, from the previous estimate of 6.8%.

From the Sensex firms, State Bank of India, Bajaj Finserv, Bajaj Finance, Maruti, HCL Tech, Larsen & Toubro, Mahindra and Mahindra and Infosys were among the major winners.

However, Hindustan Unilever, Eternal, Tata Motors Passenger Vehicles, and Sun Pharma were among the laggards.

Rate-sensitive stocks — bank, auto and realty — ended higher.

“Indian markets have enthusiastically responded to the RBI’s unexpected 25 bps rate cut, a move that seemed unlikely given the strong Q2 GDP data. This surprise, combined with sharply lower inflation forecasts and supportive liquidity measures, has triggered a risk-on sentiment across equities. Rate-sensitive sectors such as autos, real estate, and NBFCs are leading the gains due to reduction in cost,” Vinod Nair, Head of Research, Geojit Investments Ltd, said.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,944.19 crore on Thursday (December 4, 2025), while Domestic Institutional Investors (DIIs) bought stocks worth ₹3,661.05 crore, according to exchange data.

In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index settled in positive territory while Japan’s Nikkei 225 index ended lower.

Markets in Europe were trading higher. U.S. markets ended on a flat note on Thursday (December 4, 2025).

Brent crude, the global oil benchmark, climbed 0.16% to $63.36 per barrel.

On Thursday (December 4, 2025), the Sensex edged higher by 158.51 points, or 0.19%, to settle at 85,265.32. The Nifty climbed 47.75 points, or 0.18%, to 26,033.75.

Published – December 05, 2025 10:45 am IST

“The export sector is a vital part of India’s economy,” said RBI Governor Sanjay Malhotra. File.
| Photo Credit: Reuters

Representative image
| Photo Credit: Reuters

Representational image of Kotak Mahindra Bank branch in New Delhi
| Photo Credit: Reuters

S&P Global upgraded Kotak Mahindra Bank’s credit rating to ‘BBB’ from ‘BBB-’ on Friday (February 21, 2025) after the Reserve Bank of India (RBI) recently lifted operational curbs.

“We believe Kotak Mahindra Bank is well positioned for growth over the next 24 months. This is after India’s central bank lifted restrictions on the bank onboarding new customers or issuing fresh credit cards.

“We have therefore removed the negative comparable rating analysis adjustment under our comparative rating analysis on the private sector bank. This leads to a higher SACP assessment of ‘BBB’, from ‘BBB-’ earlier,” said the rating agency in a statement.

The Kotak Mahindra Bank controversy | Explained

The banking regulator had directed Kotak Mahindra to stop digital customer onboarding and cease credit card issuance in April 2024. Following this the bank took corrective action and submitted compliance reports to the RBI. The central bank then lifted the curbs on February 12.

“Kotak Mahindra Bank’s funding profile will continue to remain healthy, in our view. The resumption of digital onboarding will help the bank to ramp up low-cost digital deposits, improve granularity of deposits, and enhance its deposit franchise.

Kotak Mahindra Bank continues to have one of the highest current and savings account (CASA) deposit ratios in the industry. CASA deposits accounted for 42.3% of the bank’s total deposits as of Dec. 31, 2024” S&P said.

Davos:

Attributing the fall in Indian rupee solely to the US dollar getting stronger, former Reserve Bank governor Raghuram Rajan has said any intervention by the RBI on this can end up harming Indian exports even as he urged policymakers to focus on creating more jobs and boosting household consumption.

Asked what the second term of US President Donald Trump means for the global and Indian economy, Rajan said, “I think it means uncertainty. President Trump during his campaign laid out a bunch of policies and measures that he wants to implement.”.

“We are seeing some of them being implemented. We have to see how intensely, for example the policy on immigration and trade and tariff proposals against whom and against which sectors are implemented. As of now what and how all this will pan out,” the eminent economist said.

On appreciation in the US dollar and its impact on other currencies especially in emerging markets including rupee, Rajan said the dollar has been appreciating against other currencies, partly due to fear of Trump tariffs.

“If he imposes tariffs, it is going to decrease US imports from other countries, narrowing the current account deficit and the trade deficit. So, from that perspective, it means that the US needs to import less and so dollar will strengthen because there would be fewer dollars in the rest of the world. So, that is the straight forward reason,” the former IMF chief economist said.

“There is also a view that the US is becoming more attractive as an investment venue because the people who can’t export to the US will move their production to the US. Also, you are seeing more capital flowing into the US and that is also leading to a stock market boom and also strengthening the dollar,” he said.

All these reasons, along with the US economy growing very strongly, are leading to a stronger dollar, he added.

Asked if there is not anything that the Reserve Bank of India can do to arrest dealing rupee, Rajan said, “I am not sure whether RBI should do anything because every other currency is depreciating against the US dollar because if it tries to elevate rupee vis-a-vis dollar, it will be essentially strengthening rupee against all other currencies and that would make it more difficult for our exporters.”.

“So, I will be careful about that. I will only intervene if the depreciation of rupee is really abrupt and creates a lot of volatility. That has always been the RBI’s motive for any intervention, that is to reduce volatility and not to try and change the eventual level of rupee,” he added.

“I think the Reserve Bank has not acted in hurry and it is also not done any intervention with an aim of preserving the value of rupee at some particular level. It has always allowed the market to find its own level,” he said.

Asked whether the US becoming more attractive investment destination is happening at the cost of another country and can it have any impact on India as an investment destination, Rajan said, “The idea behind tariffs is to reshore production, so it will have an impact on foreign direct investments of other countries.” Instead of investing in other countries, people will invest in the US, he said.

“For example, we are seeing Taiwan investing more in US to produce semiconductors there. That is not so much because of tariff policy but because of incentives given though. But we can also see tariff policy producing incentives for producing from factories in the US directly,” he explained.

On expectations from the Union Budget in India, Rajan said, “We do need to worry about the recent slowing of economic growth.” “Of course, one quarter does not tell the whole picture but it has come after we were growing very slowly before the pandemic, then during the pandemic, there was a little bit of crash and then we recovered,” he said.

“The worry is that a lot of the strong growth in the recent years was a recovery growth and now we have to build a sustainable growth. And that sustainable growth will come from having big investments and consumption growth,” Rajan said.

“We have worries on those two fronts. Private investments have not picked up. When we look at demand, earlier it was middle class and lower middle class which were soft on demand, for example on two-wheelers, and now it is the upper middle class where demand is softening,” he said.

Household demand for consumption comes when households feel comfortable and when their jobs and income are growing, Rajan said.

“Recently we have seen worries about jobs people have and the kind of income they have. For these reasons, I will suggest that the focus in the budget is how we create more jobs, create better jobs and create more confident households,” he said.

“More households consuming more will result in private industries investing more. So it is a virtuous circle and we need to figure how we fix this,” he said. 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

Employee attrition in private sector banks has witnessed an increase to about 25 per cent and this high turnover rate poses significant operational risk, according to the latest Report on Trend and Progress of Banking in India 2023-24.

Employee attrition rates are high across select private sector banks and small finance banks (SFBs), the report, which was released by the Reserve Bank of India (RBI) said.

The total number of employees of private banks surpassed that of public sector banks (PSBs) during 2023-24, but their attrition has increased sharply over the last three years, with average attrition rate of around 25 per cent, it said.

“High attrition and employee turnover rate pose significant operational risks, including disruption in customer services, besides leading to loss of institutional knowledge and increased recruitment costs. In various interactions with banks, the Reserve Bank has stressed that reducing attrition is not just a human resource function but a strategic imperative,” it said.

Banks need to implement strategies like improved onboarding processes, providing extensive training and career development opportunities, mentorship programmes, competitive benefits, and a supportive workplace culture to build long-term employee engagement, it said.

In view of several irregularities observed in grant of loans against gold ornaments and jewellery, including top-up loans, the Reserve Bank advised supervised entities to comprehensively review their policies, processes and practices on gold loans to identify gaps and initiate appropriate remedial measures in a time-bound manner.

Supervised entities were advised to closely monitor their gold loan portfolios and ensure adequate controls over outsourced activities and third-party service providers, it said.

The report said climate change risks are envisaged to impact profitability of financial institutions, growth prospects, and inflation dynamics and, thus, impinge upon financial stability and price stability.

To foster assessment of these concerns by regulated entities, regulatory and supervisory frameworks need to be strengthened with enhanced risk management guidelines, disclosure requirements, periodic stress testing, and stipulating reasonable verification and assurance functions, it added.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)