Interest rates to remain low in medium to long term: RBI Guv

Malhotra said the Indian economy is very strong, resilient and robust

mumbai

The RBI Governor Sanjay Malhotra on Wednesday expressed confidence that interest rates will remain low in the medium to long term, given the benign inflationary conditions. Malhotra said the Indian economy is very strong, resilient and robust. "We are in a neutral state... possibility either way, anyway cannot be ruled out that low rates [would] continue for a long time," he said.

Despite shocks, he said, the RBI is projecting a GDP growth of 6.9% for the current financial year and stressed that this is not an optimistic estimate.

"Structurally, long-term, macroeconomic fundamentals, because of various measures which the government has taken, which the RBI has taken, which various institutions have taken, remain very strong and continue to drive growth on the one hand, and at the same time keep price pressures contained. So, it's quite possible that even in the short to medium term, we will continue to have low rates," he added. Malhotra said he does not expect any significant impact on the credit growth due to the West Asia conflict and added that there is no risk to asset quality at a systemic level as of now.

Bank NPAs decline to 2%

Indian scheduled commercial banks' gross non-performing assets (NPAs) ratio declined further to 2% in December 2025, the Reserve Bank of India (RBI) said on Wednesday. 

Gross NPAs, which represent the proportion of loans unpaid for over 90 days, for the banking system had stood at 2.5% in the year-ago period, as per the bi-annual Monetary Policy Report released by the central bank.The improvement in asset quality was across sectors, including retail loans, services, industry and agriculture.