RBI Monetary Policy: The decision was taken by the Reserve Bank’s Monetary Policy Committee rate-setting panel in its third bi-monthly policy meeting for FY25. The Reserve Bank has kept rates unchanged for the last 18 months.
RBI Monetary Policy: The three-day meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) ended on Thursday morning. Giving information about the decisions taken in the meeting, RBI Governor Shaktikanta Das, who was presiding, said on Thursday, this time also the members have not made any change in the repo rate. The current repo rate will remain at 6.2 percent.
Instability is being seen at the global level. Inflation is still the biggest concern for RBI. This is the reason why the committee has once again decided to keep the repo rate stable at 6.5 percent. One thing has become clear from this decision of the central bank, the customers who were waiting to take cheap loans will have to wait longer.
Repo rate not changed for 18 months
The Reserve Bank’s Monetary Policy Committee rate-setting panel held its third bi-monthly policy meeting for the financial year 2025, in which this decision was taken. The Reserve Bank has kept the rates unchanged for the last 18 months. The RBI Governor said that instability is being seen globally. However, inflation is decreasing worldwide.
Central banks of the world are taking decisions on interest rates based on the state of the economy. The domestic economy remains strong. The performance of the service sector has improved significantly. The strength in the service sector and the construction sector continues. The RBI Governor said that GDP is expected to remain at 7.2 percent in the financial year 2024-25.
Digital Loan Apps
The Reserve Bank has proposed to create a public repository for digital lending apps. Regulated entities will report their digital lending apps to the Reserve Bank to ensure better monitoring. This will make it easier for people to know about unauthorized digital lending apps.
UPI Transaction Limit
Governor Das has announced to increase the UPI tax payment limit from Rs 1 lakh to Rs 5 lakh per transaction. He said that UPI transaction for the purpose of tax payment can be increased from the current Rs 1 lakh to Rs 5 lakh.
Speed up in check clearance
Das said that now the time of clearing cycle of check clearing has been reduced to 2 working days. Now check clearing will be done within a few hours in a single day.
Inflation pressure
The Reserve Bank Governor said that the pressure of food prices cannot be ignored. RBI has maintained the inflation forecast at 4.5 percent for the financial year 2025. Das said that the central bank is cautious about inflation. It is expected that inflation will come down. He said that RBI’s efforts to bring inflation rate to 4 percent are continuing. Das said that food inflation rate is still in a worrying situation. Still, the growth rate will remain fast. The Governor said that South West Monsoon is better so far. Kharif sowing is also good.
Foreign exchange reserves
Das said that the foreign exchange reserves are at a historic high of $675 billion. He said that India’s foreign exchange reserves were at a historic high of $675 billion as of August 2, 2024.
Banking sector
Shaktikanta Das said that banks are facing challenges regarding funding. Banks should promote domestic savings. Banks are facing challenges in increasing deposits. Many companies are not following home loan rules. One should be careful about top up on loans. He said that the central bank has taken necessary steps to prevent rule violations. Banks will have to prepare a framework to maintain strength. Framework is necessary for smooth operation system..
