• Slashed 25 bps to 5.25% to boost credit, consumption, and investment.
• Lower borrowing costs improve affordability and accelerate project financing.
• Banks get liquidity, sets stage for long-term credit growth and market confidence.

In a move that underscores the Reserve Bank of India's commitment to sustaining economic momentum amid benign inflationary pressures, the Monetary Policy Committee (MPC) on December 5, 2025, unanimously decided to slash the repo rate by 25 basis points to 5.25 percent. This marks the fourth rate reduction in the calendar year, aggregating to a cumulative easing of 125 basis points since early 2025.

The decision comes as headline inflation fell to a multi-decade low of 0.25 percent in October, well below the 4 percent target, alongside an upwardly revised GDP growth projection of 7.3 percent for FY 2025-26. The rate cut seeks to lower borrowing costs, boost credit, and stimulate investment and consumption, while banks face liquidity benefits, margin pressures, and long-term growth opportunities.

Here Are Top 10 Voices on How RBI’s Repo Cut is Shaping India’s Economy

Bittu Varghese, CFO, Table Space

 "A 25 bps repo rate counterbalances the low inflation rate and supports increase in domestic consumption by making debt more attractive. Within our industry, this can lead to higher demand from enterprises and GCCs, cheaper capital directly translates into greater headroom to scale hybrid operations in high-quality Grade A environments. The flex segment, already a key contributor to office absorption, stands to gain as zero-capex, tech-enabled models become even more attractive amid resilient metro demand and steady consumption. This is more than a marginal rate adjustment, it has the potential to reshape occupier behaviour, accelerate credit deployment, and reinforce flexible, serviced workspaces as a central pillar of the next phase of India’s office market”.

Umesh Uttamchandani, Co-Founder and Chief Growth Manager, DevX

"The RBI’s pro-growth and pro-liquidity move to reduce the repo rate to 5.25% while maintaining a 'Neutral' stance is a strategic masterstroke that capitalizes on India’s current 'Goldilocks' moment, characterized by robust 8.2% GDP growth and record-low inflation. For the commercial real estate sector, this acts as a dual enabler. On the supply side, easier access to finance will directly translate into faster project deliveries, particularly accelerating our expansion into Tier-2 markets”.

Rakesh Reddy, Director, Aparna Constructions

 “The latest repo rate cut marks a standout moment for the Indian economy, where strong growth is aligning with soft inflation, thus creating an ideal macroeconomic environment. With the repo rate now at 5.25%, alongside revised SDF, MSF, and Bank Rate levels, we are entering a phase of healthier borrowing conditions and renewed consumer optimism. With cumulative repo rate cuts reaching 125 basis points this year alone, it is evident that monetary policy is decisively shifting toward easing. Coupled with the RBI’s liquidity-support measures, these cuts will keep credit flowing smoothly across the economy”.

Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Ltd.

"The RBI’s decision to reduce the repo rate by 25 basis points to 5.25% with a 'neutral' stance is a decisive and welcome move that perfectly aligns with the current macroeconomic sweet spot. With October’s CPI inflation cooling to a historic low of 0.25%, the central bank had the necessary headroom to prioritize growth without compromising stability.

For the real estate sector, this is a significant sentiment booster as we head into the final quarter of the financial year. This reduction will likely push home loan interest rates further below the 8% mark, effectively increasing affordability and borrowing power for fence-sitters in the mid-income and premium segments”.

Vijay Wadhwa, Chairman, The Wadhwa Group

“The reduction in repo rate, though measured, is a timely step that strengthens momentum in the housing sector. A decrease of 25 basis points can meaningfully influence sentiment, especially for first-time and end-use buyers, and may stimulate incremental investment appetite. The RBI’s decision to bring the repo rate down to 5.25%, alongside raising the GDP growth outlook to 7.3%, reinforces confidence in the broader economic trajectory and is expected to ease EMIs for millions of households”.

Also Read: Why Banks Are Spending Billions on Quantum-Safe Encryption

Ajay Kumar Srivastava, Managing Director and CEO, Indian Overseas Bank

“We welcome the RBI’s decision to reduce the repo rate by 25 basis points to 5.25 per cent while maintaining a neutral stance. This policy supports growth while keeping inflation at or below the 4 per cent target, with real GDP expected at 7.3 per cent for 2025-26 (Q3 at 7.0 per cent; Q4 at 6.5 per cent, Q1 2026-27 at 6.7 per cent and Q2 at 6.8 per cent). The rate cut is expected to ease borrowing costs, spur demand in housing and real estate, support MSMEs and sustain personal and auto loan growth.

On the financial sector side, bank credit growth remains healthy at 11 percent and overall credit from bank and non-bank sources has risen by 13.1 percent. The RBI’s Rs 1 lakh crore OMO purchases along with the 3-year USD/INR buy-sell swap will support liquidity and monetary transmission. These measures will encourage domestic investment and deepen financial access".

Adhil Shetty, CEO & Co-Founder, BankBazaar

“With a 25 basis point cut, policy is now more clearly aligned towards supporting growth. Home loan borrowers will see modest but meaningful relief as lending rates adjust. The cumulative 125 basis point reduction this year has already eased EMIs, and for a Rs 50 lakh loan over 20 years the fall in rates can reduce lifetime interest outgo by about Rs 9 lakh. Existing borrowers can enhance savings by holding EMIs steady and shortening tenure, which helps bring long-term liabilities under better control.”

Ashish Narain Agarwal, Founder & MD, PropertyPistol

“The move to cut the repo rate to 5.25% is a positive step for homebuyers, especially in pricier metros like Mumbai, where affordability is the primary friction. A 25-bps reduction can lower the EMI on a Rs 50-lakh home loan by roughly Rs 750-Rs 800 over 20 years, providing the psychological nudge many salaried buyers need. However, the strategic value of this cut depends on how borrowers utilise it".

Vishal Raheja, Founder & MD, InvestoXpert Advisors Pvt. Ltd.

“The RBI’s rate cut is set to reinforce confidence across both end-buyer and investor segments, particularly in lifestyle-led and high-demand markets such as Goa, Bengaluru and Delhi-NCR. The financial impact, though subtle in percentage terms, is meaningful in real numbers, a 25-bps reduction reduces EMI on a Rs 60-lakh home loan by approximately Rs 900-Rs 1,200 per month, saving over Rs 10,000 annually assuming full transmission. This breathing room meaningfully improves the feasibility of second homes, investment apartments and plotted developments, especially in amenity-rich corridors”.

Saket Gaurav, CMD, Elista

 "For the consumer durables sector, this rate cut to 5.25% is a crucial enabler. It will lift consumer sentiment and make it easier for manufacturers to fund expansion. Combined with the positive impact of the GST cut on trade, this significantly improves liquidity. The result is a stronger, more competitive Indian durables sector, poised for faster growth in domestic sales and exports”.

Summing It Up!

In short, the 25 bps cut is the opening shot of a decade-long war for credit market share that will separate the next generation of winners from the legacy pack.

The RBI has handed banking and financial stocks the rarest of gifts, a multi-year growth runway with inflation handcuffed, liquidity abundant, and asset quality pristine. Short-term margin noise will dominate headlines for two quarters, but the structural re-rating has only just begun.