The Reserve Bank of India's Monetary Policy Committee (MPC) meets every two months (six times a year) and votes on the repo rate — the interest rate at which RBI lends overnight to commercial banks. This single number is the foundation of all other interest rates in the economy: home loans, car loans, FD rates, and corporate borrowing costs all trace back to it.
Key RBI Rates — What They Mean
The Monetary Policy Committee — Who Are These Six People?
MPC Composition
- 3 RBI officials: Governor (chair), Deputy Governor, and one officer nominated by Central Board
- 3 external members: Nominated by the Central Government for 4-year terms — economists and policy experts
- Decisions by majority vote; Governor has casting vote in case of tie
- Minutes published 14 days after the decision — shows how each member voted and their reasoning
- If inflation stays outside 2–6% for 3 consecutive quarters, MPC must write to government explaining why
MPC decisions come out on the last day of the meeting (follow @RBI on Twitter or rbi.org.in). MCLR (Marginal Cost of Funds based Lending Rate) is how banks translate the repo into loan rates. Your bank's MCLR review date (shown in your loan agreement) is when your EMI could change — usually within 1–3 months of a repo rate change.
Understanding the MPC's 'stance' is as important as the rate number. 'Accommodative' means RBI is willing to cut rates if needed — good for borrowers. 'Neutral' means it could go either way. 'Withdrawal of accommodation' means it is leaning toward holding/hiking. The RBI changed its stance to 'neutral' in October 2024 — signalling the end of the post-COVID rate hike cycle.
6
MPC members
6.5%
Repo Rate (May 2026)
6x/year
MPC meetings
14 days
Minutes published after
What is the Cash Reserve Ratio (CRR) and why does the RBI use it?
Arjun Menon
Economy Reporter