RBI MPC Review Meeting August 2024 Key Takeaways: Here's what Shaktikanta Das said on repo rate, GDP forecast, CPI inflation, digital lending data base, and other things

MPC keeps repo rate unchanged

For the ninth consecutive time, the MPC has kept the repo unchanged at 6.50 per cent. After the meeting, Shaktikanta Das said, "There is a good amount of convergence in market expectations and the MPC policy, flexible inflation targeting framework will complete 8 years.

GDP forecast unchanged

The RBI has also kept GDP forecast unchanged for FY25 at 7.2 per cent. Das said, "We have decided to focus on inflation and ensure price stability, mainly to support growth, policy must continue to be disinflationary and resolute in its commitment to bring inflation to 4%." 

 

GDP forecast quarter-wise

The RBI has also revised the GDP forecast for the first quarter and has maintained for Q2, Q3, and Q4.

For Q1FY25, it has reduced the GDP forecast to 7.10 per cent from 7.30 per cent.  

For Q2FY25, the central bank has maintained the GDP forecast at 7.20 per cent.   

For Q3FY25, the RBI has maintained the GDP forecast at 7.30 per cent.   

For Q4FY25, it has maintained the GDP forecast at 7.20 per cent.

CPI Inflation forecast

The RBI has maintained FY25 consumer inflation (CPI) forecast at 4.5 per cent. The CPI forecast for Q2, Q3, and Q4 have been changed.

However, Shaktikanta Das said that food inflation remains a concern.

CPI Inflation forecast quarter-wise

The central bank CPI forecast for Q2, Q3, and Q4 have been changed.

For Q2FY25, the current CPI inflation estimate is 4.4 per cent against the previous estimate of 3.8 per cent.
For Q3FY25, the current CPI inflation estimate is 4.7 per cent against the previous estimate of 4.6 per cent.
For Q4FY25, the current CPI inflation estimate is 4.3 per cent against the previous estimate of 4.5 per cent.
The MPC has also given the target for Q1FY26, the CPI inflation estimate is 4.4 per cent.

Withdrawal of accomodation

The MPC has maintained its stance on the withdrawal of accommodation.

UPI tax payment limit raised to Rs 5 lakh from Rs 1 lakh

To up UPI tax payment limit, the RBI has raised it to Rs 5 lakh from Rs 1 lakh.
The RBI governor has also proposed to create a public repository of digital lending apps.
Das says that there is a proposal of delegated UPI payments, due to which digital payments will increase.
"People will be able to give others payment exemption by setting a limit. The primary user will set the spending limit of the secondary user," said Das.

 

RBI governor on home loans

Shaktikanta Das said about home loan: "Home equity loans have been growing at a brisk pace. Banks and NBFCs are offering top up loans on other collaterlised loans like gold loans. This may lead to loans being deployed in unproductive sectors."

 

Data base for digital lending

Shaktikanta Das said that a database will be created for digital lending apps. "You will be able to identify the correct and wrong apps by looking at the name in the database. The RBI website will have information about the correct lending apps," he said during the MPC meeting.

Update from credit information firms

The RBI governor said that credit information companies need to get update their customers after every 15 days. "So far, they update customers once a month, which cause problems to them. Sometimes credit score is not updated even after full payment," said Das.

Proposal for delegated UPI payments

RBI governor says that there is a proposal of delegated UPI payments, due to which digital payments will increase.
"People will be able to give others payment exemption by setting a limit. The primary user will set the spending limit of the secondary user," said Das. 

Quick cheque-clearing facility to be introduced

Shaktikanta Das said that there is a proposal to bring in a system of quick cheque clearing. "Currently, the system of cheque clearing on the basis of batch is in place.  It takes two days to clear the cheque. The RBI's target is to complete the clearing in a few hours."