With reference to the RBI's monetary policy rates, consider the following statements: 1. The marginal standing facility and bank rate are both set at 5.75%. 2. The policy repo rate is set at 5.5% as of October 2026. 3. The Standing Deposit Facility (SDF) rate is maintained at 5.75%. Which of the statements given above is/are correct?

RBI MPC unanimously votes to increase policy repo rate by 25 basis points

GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains· 7 October 2026

Monetary policy tools and inflation targeting: a core GS3 topic for banking and macroeconomics.

Why in news

The RBI Monetary Policy Committee unanimously voted to increase the policy repo rate by 25 basis points to 5.5% to manage monetary conditions.

Background

RBI Governor Sanjay Malhotra announced the repo rate hike to 5.5% with the Standing Deposit Facility (SDF) rate at 5.25%. The marginal standing facility and bank rate are set at 5.75%.

Facts for Prelims

FactPolicy repo rate: 5.5% as of October 2026
FactStanding Deposit Facility (SDF) rate: 5.25%
FactMarginal standing facility and bank rate: 5.75%
FactSEBI-regulated depositories must include deposit accounts in consolidated statements by December 31, 2026
BodyRBI to constitute a Technical Consultative Committee for Financial Markets

Prelims practice question

With reference to the RBI's monetary policy rates, consider the following statements:

The marginal standing facility and bank rate are both set at 5.75%.
The policy repo rate is set at 5.5% as of October 2026.
The Standing Deposit Facility (SDF) rate is maintained at 5.75%.

Which of the statements given above is/are correct?

(a)2 only
(b)1 and 2 only
(c)2 and 3 only
(d)1, 2 and 3

Show answer

Answer: (b) 1 and 2 only — Statements 1 and 2 are correct. Statement 3 is incorrect: The SDF rate is 5.25%.

For Mains

Q. Discuss the role of the Monetary Policy Committee in balancing inflation control with economic growth in India's current fiscal landscape.

Dimensions to cover in your answer

Monetary transmission: Impact of repo rate hikes on lending rates and private sector credit availability
Liquidity management: Balancing the SDF and marginal standing facility to ensure systemic stability
Transparency in securities: Impact of consolidated deposit statements on investor protection and market integrity

Keywords: Monetary Policy · Repo Rate · Inflation Targeting · Liquidity Management · Financial Stability

Read the full news →Source: Economic Times ↗

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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.