Shaktikanta Das,Governor,RBI
Das said taking into account the economic factors the MPC has predicted GDP growth at 6.5 per cent in FY24
As regards the inflation rate, the MPC forecast was 5.4 per cent for 2023-24 taking into account the various domestic issues including potential agricultural produce
Mumbai:
As predicted by economists, the Reserve Bank of India’s Monetary Policy Committee (MPC) did not change the repo rate from 6.50 per cent.
Announcing the decision of the MPC after its three-day deliberations, RBI Governor Shaktikanta Das said on Friday that the committee unanimously decided to keep the repo rate at 6.5 per cent.
Das said taking into account the economic factors the MPC has predicted GDP growth at 6.5 per cent in FY24.
As regards the inflation rate, the MPC forecast was 5.4 per cent for 2023-24 taking into account the various domestic issues including potential agricultural produce.
Das also said uncertainty exists due to geopolitical situation, monsoon and others.
The MPC met on October 4-6.
Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company, “The RBI governor mentioned that the pitch is turning and we will play the ball on merit. The central bank has shown its confidence to manage liquidity, inflation, growth, rupee and financial sector stability in an appropriate equilibrium. It has worked hard to create a balance between growth and inflation setting an example for rest of the world. This policy continues to take that hard work forward.”
Doubles lending limits for gold loans for UCBs to Rs 4 lakh, to introduce Card-on-File Tokenisation
Meanwhile, the RBI announced doubling the lending limits for gold loans under the bullet repayment scheme for urban cooperative banks to Rs 4 lakh.
”It has been decided to increase the existing limit for gold loans under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023,” Das said.
A bullet repayment scheme is one where a borrower repays interest and the principal amount at the end of a loan tenure without worrying about repayment during the loan tenure.
Das, who had a meeting with top brass of UCBs recently, said the measure is in line with the RBI’s earlier announcement of providing ”suitable incentives” to UCBs that have met the prescribed PSL targets, wherein a lender is mandated to devote a certain part of its overall lending for the marginalised sector.
Speaking after announcing the bi-monthly policy review, Das also announced that the RBI will be issuing a comprehensive regulatory framework on project finance.
”With a view to strengthen the extant regulatory framework governing project finance and to harmonise the instructions across all regulated entities, the extant prudential norms for projects under implementation have been reviewed,” he said, adding that detailed draft guidelines will be released for public comments.
He also announced that non-bank lenders in the ‘middle and base layers’ will be permitted to use Credit Risk Mitigation instruments for reducing their counter party exposure under the credit concentration norms, just like their peers classified in the ‘upper layer’ are allowed to right now.
The RBI is also mulling introducing Card-on-File Tokenisation (CoFT) creation facilities directly at the issuer bank level, given the growing acceptance and benefits of tokenisation of card data, Das said, adding that this will help make e-commerce transactions more convenient.
With IANS inputs