Loan borrowers got a big shock! This decision of RBI will not reduce your EMI, but will increase the burden on your pocket.

If you were hoping that your home or car loan EMI would reduce this month, then the Reserve Bank of India (RBI) has given you a big shock. RBI has decided not to make any change in the repo rate in its June 2026 monetary policy review. This simply means that the burden of loan on your pocket will remain the same for now.

In this June meeting, RBI Governor Sanjay Malhotra has announced to keep the repo rate as it was in April. After this decision, the repo rate in the country still remains at the level of 5.25 percent. Let us tell you that before this, the Reserve Bank had last cut interest rates in December 2025. At that time the Central Bank had reduced the interest rate from 5.5 percent to 5.25 percent, after which there has been no change in the rates.

RBI keeps a close eye on inflation and global challenges

Announcing the policy, RBI Governor Sanjay Malhotra said that despite the ongoing economic shocks across the world, India’s CPI inflation rate remains below our target. The main reason for this is that the global turmoil has had a very limited and minimal impact on our domestic prices. However, he has also given a warning that as per our baseline estimates, the headline inflation rate may move towards the upper tolerance level in the third quarter (Q3) of this year, which needs to be continuously monitored.

Indian economy is strong, but input cost is increasing, there is concern

Governor Malhotra expressed confidence in the economic health of the country and said that overall our economic situation has shown strength to a great extent. The Indian market has bravely faced the impact of ongoing conflicts and challenges across the world. However, he also admitted that cost pressures are now clearly visible.

He further cautioned that the future rise in prices of energy and other input materials, as well as disruptions in the supply chain, are likely to have an impact on future economic activity. This is the reason why the Central Bank is currently taking cautious steps.