The Reserve Bank of India’s Monetary Policy Committee (MPC) held its post-policy press conference on June 5, 2026. Governor Sanjay Malhotra led the RBI MPC press conference alongside four Deputy Governors. The central bank announced several major measures to boost capital inflows and support economic stability.
Key RBI MPC Policy Decisions
The RBI announced a concessional forex swap window for External Commercial Borrowings (ECBs) by public sector undertakings. Additionally, the central bank introduced a short window for FCNR (B) deposits, offering banks CRR and SLR dispensation. Governor Malhotra confirmed the bank expects healthy capital inflows as a result of these combined measures.
On inflation, the RBI revised its baseline CPI forecast upward by 50 basis points to 5.1%. However, Governor Malhotra stressed the 4% inflation target remains sacrosanct. He noted the RBI will act only if inflation becomes generalised or builds into expectations — not merely due to short-term supply shocks.
The crude oil price assumption has also been revised to USD 95 per barrel. Meanwhile, the RBI confirmed forex reserves cover approximately 11 months of imports. Therefore, the Governor expressed strong confidence in India’s external position.
What This Means for Customers and Markets
On deposit rates, Governor Malhotra said competition among banks is healthy, provided it remains transparent. The RBI MPC press conference also clarified that differential deposit rates are permitted only for specific categories — such as senior citizens — and must be publicly displayed. Any non-transparent differential rate structure is unacceptable.
Credit growth remains robust at over 16%, indicating good monetary transmission. Additionally, gross FDI reached USD 15 billion in April alone, signalling strong investor confidence. The RBI does not currently plan to restrict capital outflows through the Liberalised Remittance Scheme.
On polymer banknotes, the Governor confirmed the proposal is under active consideration, though no final decision has been made yet. For ATM cash shortages, the RBI assured it will ensure swift currency replenishment wherever needed.
Outlook and Key Risks
Governor Malhotra identified supply disruptions and their duration as the biggest near-term risk. Monsoon uncertainty and El Niño effects also remain on the RBI’s watchlist. However, he emphasised India’s economy is in a strong position compared to global peers, with growth exceeding 6.5%. The RBI will remain data-dependent and monitor inflation expectations closely through household surveys going forward.
Source: RBI Speeches
