New monetary policy review was the first by the six-member monetary policy committee headed by Reserve Bank of India’s governor Urjit Patel. The repo policy rate is now at its lowest since November 2010.
The monetary policy committee (MPC) headed by RBI governor Urjit Patel on Tuesday cut repo rate by 25 basis points to 6.25 percent.
The cut in repo rate may lead to a fall in home and auto loan EMIs. Markets also reacted positively to cut in repo rate and Sensex jumped over 100 points.
MPC was introduced the new policy to make decision-making more transparent and more collegiate. Hitherto, the RBI governor had taken sole responsibility for the deciding rates.
The governor still gets a deciding vote if the panel is evenly split. All six members of MPC voted in favour of rate cut.