RBI MPC meeting

RBI MPC meeting

News: The Reserve Bank of India (RBI) refrained from surprising the market as on expected lines it kept policy rates and stance unchanged.

Key Highlights:

Status quo on repo rate, policy stance
• RBI kept the repo rate unchanged at 6.5 per cent and maintained the policy stance of 'withdrawal of accommodation'.
• The standing deposit facility (SDF) rate remains at 6.25 per cent and the marginal standing facility (MSF) rate and the bank rate at 6.75 per cent.

Optimistic growth forecast
• The RBI raised its real GDP growth projection for FY24 to 7 per cent from 6.5 per cent earlier with Q3 GDP at 6.5 per cent (against the estimates of 6 per cent earlier) and Q4 GDP at 6 per cent (against the estimates of 5.7 per cent earlier).

Inflation forecast unchanged
• The RBI kept the inflation forecast unchanged as it projected Consumer Price Index (CPI)-based inflation, or retail inflation, at 5.4 per cent for FY24, with Q3 projection at 5.6 per cent and Q4 projection at 5.2 per cent.

Framework for connected lending
• Governor Das said that the extant guidelines on connected lending are limited in scope. So the RBI has decided to come out with a unified regulatory framework on connected lending for all regulated entities of the Reserve Bank.

SDF, MSF allowed even on weekends, holidays
• RBI decided to allow the reversal of liquidity facilities under both SDF (Standing Deposit Facility) and MSF (Marginal Standing Facility) even during weekends and holidays with effect from December 30, 2023.

Enhanced UPI transaction limit for specified categories
• The RBI proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from ₹1 lakh to ₹5 lakh per transaction.