New Delhi, February 2024.
RBI keeps the repo rate steady at 6.5% with five out of six members voting in favour of the rate decision Experts were also expecting the repo rate to remain steady at 6.5 percent
– MPC also decided by a majority (5 out of 6 members) to remain focused on the withdrawal of accommodation to ensure the inflation progressively aligns with the target while supporting growth. Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.
– The Reserve Bank of India (RBI) has maintained its inflation projection at 5.4% for 2023–2024.
– CPI inflation is predicted to be 4.5% for the upcoming fiscal year 2024–2025, with Q1 at 5%, Q2 at 4%, Q3 at 4.6%, and Q4 at 4.7%.
RBI decision to have a key fact statement related to retail and MSME advances will empower customers, says SBI Chairman
“The MPC decision to hold rates and stance was expected but the set of regulatory decisions holds out a pragmatic and steadfast approach in the quest for digital robustness, customer centricity and price discovery. The decision to have a key fact statement regarding retail and MSME advances will empower customers to make informed decisions. Enhancing the robustness of AePS, authentication of digital transactions through new mechanisms and operational changes in CBDC are all important milestones of systemic resilience and a better future,” said Chairman of SBI Dinesh Khara.
Anu Aggarwal, President & Head Corporate Banking, Kotak Mahindra Bank said, “As the RBI maintains its stance of no change on interest rates for the sixth consecutive policy review, we acknowledge the stability it brings to the financial landscape. The sustained pause in the repo rate is poised to benefit India’s economic trajectory positively. Moreover, the remarkable growth in capital expenditure witnessed in FY24, coupled with robust capex push by the government underscores a pivotal moment for economic resurgence. The capex push also aligns with the broader endeavour to propel India towards achieving its $5 trillion economy milestone.”
George Alexander Muthoot, MD, Muthoot Finance said “We appreciate the RBI’s prudent decision to keep the repo rate unchanged at 6.5% and maintain their stance on ‘withdrawal of accommodation’ to align with the evolving growth-inflation dynamics and remaining focussed on ensuring sustainable growth for the Indian economy. This may keep interest rates slightly elevated in the economy and on credit to small businesses. We remain optimistic on gold loan demand, credit demand from MSMEs, Microloans and demand for housing loans, given India’s resilient domestic economy, government thrust on capex, strong urban consumption and pick up in rural demand.
The RBI has further announced an important measure to ensure greater transparency for retail and MSME borrowers. The regulated entities are required to share a detailed document called Key Fact Statement (KFS), listing all the key information regarding a loan agreement. As an NBFC adhering to compliance, corporate governance and taking proactive measures to safeguard the interest of our customers is of prime importance to us, and we welcome this move as it will encourage and enable the borrowers to make informed decisions.”
