RBI Maintains Unchanged Rates While Monitoring Soaring Food Prices
Reserve Bank of India (RBI) under the leadership of Governor Shaktikanta Das
has disclosed the key decisions reached during the latest bi-monthly monetary
policy review for FY24. The Monetary Policy Committee (MPC) of the central
bank, comprising six members, conducted deliberations from August 8 to 10. The
pivotal outcome of this meeting is the retention of the repo rate at 6.5%. This
announcement follows a sequence of repo rate hikes totaling 250 basis points
(bps) since May 2022.
are the main highlights from the RBI Policy:
rate remains steady at 6.5%.
Deposit Facility (SDF) rate sustains at 6.25%.
Marginal Standing Facility (MSF) rate and the Bank Rate are upheld at
Reserve Ratio (CRR) stands at 4.5%.
for GDP: The projection for real GDP growth in FY224 is upheld at 6.5%.
forecast stands at 8%.
forecast maintains at 6.5%.
projection is set at 6%.
prediction rests at 5.7%.
growth estimation for Q1FY25 is envisioned at 6.6%.
Price Index (CPI) inflation forecast for FY24 is elevated to 5.4% from the
inflation projection is raised to 6.2% from 5.2%.
inflation estimation is increased to 5.7% from 5.4%.
inflation outlook is maintained at 5.2%.
inflation forecast for the period April-June 2024 is set at 5.2%.
Measures: All scheduled banks are mandated to maintain an Incremental Cash
Reserve Ratio (I-CRR) of 10% pertaining to the rise in their Net Demand and
Time Liabilities (NDTL) between May 19, 2023, and July 28, 2023.
Infrastructure Debt Fund (IDF) Framework: A revised regulatory framework has
been implemented for Infrastructure Debt Funds (IDFs). The noteworthy
modifications include: (i) withdrawal of the necessity for IDFs to have a
sponsor, (ii) empowerment of IDFs to finance toll-operate-transfer (ToT)
projects directly, (iii) authorization for IDFs to raise funds through External
Commercial Borrowings (ECBs), and (iv) optional inclusion of tri-partite
agreements for Public-Private Partnership (PPP) projects.
Mechanism for Floating-Interest Loans: A proposal is underway to establish a
transparent framework for resetting interest rates on floating-interest loans.
Payments Interface (UPI) Enhancements:
Payments are set to be launched on the UPI platform.
transaction limit for UPI Lite is amplified to ₹500 from ₹200.
of offline payments using Near Field Communication (NFC) technology is on
comprehensive update showcases the Reserve Bank of India's dedication to
maintaining financial stability and fostering economic growth in the evolving