RBI February 2026 Policy: Rates, Regulatory Changes and Market Reforms Explained

The Reserve Bank of India released its bi‑monthly monetary policy on 06/02/2026, presenting a combination of monetary, regulatory and developmental initiatives. While the overall stance remains unchanged, the policy package is significant in terms of financial sector reforms, protection of customers, support to MSMEs, and deepening of financial markets.

This article provides a structured and simplified analysis of:

  • Key decisions of the Monetary Policy Committee (MPC)
  • Major regulatory and developmental measures
  • Implications for banks, NBFCs, MSEs, investors and other market participants

A. Monetary Policy Committee Resolution – Key Outcomes

The Monetary Policy Committee met and issued its resolution on 06/02/2026. The focus remains on sustaining growth while keeping inflation anchored within the target band.

1. Policy Rates – No Change in Benchmark Repo

The MPC decided to keep all key policy rates unchanged under the Liquidity Adjustment Facility (LAF):

  • Policy Repo Rate: 5.25%
  • Standing Deposit Facility (SDF): 5.00%
  • Marginal Standing Facility (MSF): 5.50%
  • Bank Rate: 5.50%

The Committee maintained a neutral stance, signalling that future moves could be data‑dependent rather than pre‑committed towards easing or tightening.

Note: A neutral stance indicates that the RBI is not biased either towards increasing or decreasing rates in the near term and will calibrate its actions based on growth‑inflation dynamics.

2. Liquidity and Reserve Requirements

The policy also reconfirmed the prevailing reserve ratios and related rates:

  • Cash Reserve Ratio (CRR): 0%
  • Statutory Liquidity Ratio (SLR): 18.0%
  • Fixed Reverse Repo Rate: 3.35%

These parameters together shape overall system liquidity and influence funding conditions for banks and, indirectly, for the broader economy.

3. Macroeconomic Projections

The MPC’s decision is backed by an optimistic growth outlook and very subdued inflation expectations:

  • Real GDP growth for FY 2025–26 as per First Advance Estimates: 7.4%
    • Earlier RBI projection: 7.3%
  • CPI Inflation projection for FY 2025–26: 2.1%
    • Previous estimate: 2.0%

The combination of strong growth and low inflation allows the RBI to keep rates steady while monitoring global and domestic risks.

B. Developmental and Regulatory Policy Measures

Alongside the policy rate decision, the RBI issued a detailed Statement on Development and Regulatory Policies. These measures span regulation, payments, financial inclusion, markets, and capacity building.

I. Regulatory Initiatives

1. Framework for Advertising, Marketing and Sale of Third‑Party Products by Regulated Entities

Banks and other Regulated Entities (REs) frequently distribute third‑party financial products such as insurance, mutual funds or investment schemes. To ensure fairness and suitability:

  • RBI will issue comprehensive guidelines on:
    • Advertising of financial products
    • Marketing practices
    • Sales processes at bank branches and other channels
  • The core objective is to ensure products:
    • Are aligned with the customer’s needs
    • Match the risk‑taking capacity of each client

Draft instructions on this subject will be issued shortly for stakeholder feedback.

2. Uniform Conduct Standards for Recovery of Loans and Use of Recovery Agents

At present, different categories of Regulated Entities follow different sets of rules on loan recovery and engagement of recovery agents. RBI intends to:

  • Review and harmonise all conduct‑related instructions applicable to:
    • Recovery of loans
    • Appointment and functioning of recovery agents
  • Bring in a consistent set of standards across banks and NBFCs

Draft guidelines for this harmonised framework will be released for comments.

3. Review of Framework on Limiting Customer Liability in Digital Transactions

RBI had earlier issued norms in 2017 on limiting customer liability for unauthorised electronic transactions. Given the sharp expansion in digital payments and new technology use: