KEY CURRENT AFFAIRS JUNE 2025 FOR BANKING EXAMS

For banking exams in India, staying updated on current affairs, especially those related to the financial sector, RBI policies, and significant economic developments, is crucial. Here's a consolidated summary of key current affairs from June 2025 relevant for banking exams:

1. RBI Monetary Policy and Rate Cuts:

• Repo Rate Reduction: The Reserve Bank of India (RBI) cut the policy repo rate by 50 basis points (bps) to 5.50% in its June 2025 Monetary Policy Committee (MPC) meeting (June 4-6, 2025).¹ This was the third consecutive rate cut in 2025, signaling a continued effort to boost economic momentum and manage inflation.²

• Cash Reserve Ratio (CRR) Cut: Concurrently, the CRR was slashed by 100 bps to 3%, aiming to infuse liquidity into the banking system.³

• Stance: The policy stance was changed back to 'neutral' from 'accommodative', indicating a balanced approach to growth and inflation management.⁴

• Impact: Following the repo rate cut, several major banks (including SBI, Canara, Union Bank, PNB, and Bank of Maharashtra) reduced their home loan interest rates, benefiting borrowers.⁵

• Liquidity Management: RBI continues to ensure adequate liquidity, with initiatives like Variable Rate Reverse Repo (VRRR) auctions to absorb excess funds, especially as banks show a preference to park surplus funds with the RBI (Standard Deposit Facility or SDF saw record high balances in Q1 FY26).⁶

2. Banking Sector Performance and Trends:

• Smaller Banks Outperform: In the April-June 2025 quarter (Q2 FY26), smaller banks showed stronger market capitalization gains compared to their larger peers. AU Small Finance Bank, IndusInd Bank, and IDBI Bank saw significant increases.

• Improved Asset Quality: Gains in the banking sector were attributed to improved asset quality and easing interest rates. India's Bank GNPAs (Gross Non-Performing Assets) fell to a multi-decade low of 2.3% as of July 1, 2025 (reflecting Q4 FY25 data).⁷

• Credit Growth Slowdown: Despite rate cuts and liquidity injections, credit growth slowed to 9.5% year-on-year in June, significantly lower than the 16% in FY24, with slowdowns in lending to agriculture, industry, and services.⁸ This suggests persistent challenges in credit demand.

• RBI Financial Stability Report (FSR) - June 2025: The report highlighted the Indian banking sector as robust, with capital buffers at a record high (CRAR of SCBs at 17.3% in March 2025) and NPAs at a multi-decadal low. It also projects continued economic growth at 6.5% for FY26.⁹

3. Digital Payments and Financial Inclusion:

• UPI Updates:

  • UPI Beneficiary Name Verification: From June 30, all UPI apps must display the verified name of the beneficiary during transactions to reduce fraud.¹⁰

  • UPI in Cyprus: India and Cyprus signed an MoU on June 16, 2025, to introduce UPI services for cross-border transactions.¹¹

  • UPI Growth: UPI continued its strong yearly growth, with expectations to surpass Visa in daily transactions.¹²

  • UPI Speed Boost: Transactions are now faster, with processing times reduced to 10 seconds.

• EPFO 3.0 Platform: The Employees Provident Fund Organisation (EPFO) is rolling out an updated platform (EPFO 3.0) in June 2025, allowing EPF members to instantly withdraw up to ₹1 lakh via UPI and ATMs.¹³

• RBI e-Rupee: Discussions on how to use India's Central Bank Digital Currency (CBDC) continued.

4. Regulatory Updates and Measures:

• RBI Tightens AePS Rules: To combat fraud, RBI tightened AePS (Aadhaar Enabled Payment System) rules, effective from January 2026.¹⁴

• Credit Card Rule Changes: Major changes to credit card rules came into effect from July 2025, including revisions by specific banks like Axis Bank and HDFC Bank regarding reward points, cashback, and lounge access.

• SEBI Revisions for Related Party Transactions (RPTs): Effective September 1, 2025, SEBI rolled out significant revisions to Industry Standards for RPTs, mandating deeper scrutiny by Audit Committees and shareholders.¹⁵

• RBI Bans Prepayment Penalty on Floating Rate Loans for MSEs: From 2026, RBI mandates banks to ban prepayment penalties on floating rate loans for Micro and Small Enterprises (MSEs).

• RBI Mandates DoT's Financial Fraud Risk Indicator: Banks are mandated to adopt the Department of Telecommunications' (DoT) Financial Fraud Risk Indicator for cybersecurity purposes.¹⁶

5. Economic Indicators and Global Context:

• WPI Inflation: India's Wholesale Price Index (WPI) inflation for June 2025 turned negative at (-) 0.13%, primarily due to deflation in food articles (especially vegetables) and fuel sectors.¹⁷

• FPI Activity: Foreign Portfolio Investors (FPIs) showed cautious activity in June, with initial outflows in equity but positive inflows towards the end of the month. Debt market outflows were noted due to a narrow spread between Indian and US bond yields.

• Rupee Movement: The rupee experienced volatility, slipping to ₹86.4/$ in mid-June before recovering to around ₹85.38.

• CRISIL's Financial Conditions Index (FCI): India's financial environment deteriorated slightly in June 2025, with CRISIL's FCI slipping to -0.5 (from 0.0 in May), indicating tighter financial conditions.

• Union Budget 2025: (While released earlier in the year, its implications are ongoing) Key highlights included income tax relief for certain income brackets and extended time limits for updated tax returns.¹⁸

• India's Economic Growth: RBI and IMF projections indicate India remains one of the fastest-growing large economies, with RBI forecasting 6.5% GDP growth for FY26.¹⁹

Tips for Banking Exam Preparation:

• Focus on RBI: Pay close attention to all RBI circulars, monetary policy statements, and reports (like FSR). Understand the implications of rate changes and liquidity measures.

• Key Financial Terms: Be familiar with terms like Repo Rate, Reverse Repo Rate, CRR, SDF, MSF, WPI, CPI, GNPAs, CRAR, FPI, FDI, UPI, AePS, etc.

• Government Schemes: Keep an eye on new government initiatives related to financial inclusion, digital economy, and social security.

• Banking Sector News: Follow news on major banks, mergers, acquisitions, regulatory actions, and new product launches.²⁰

• Economic Indicators: Understand the trends in inflation, GDP growth, credit growth, and trade balance.

• International Developments: While focused on India, be aware of major global economic events that can impact India's financial markets (e.g., global interest rate movements, crude oil prices, geopolitical events).

Always refer to official sources like the RBI website, PIB, and reputable financial news outlets for the most accurate and detailed information.