The Reserve Bank of India’s Monetary Policy Committee (MPC) has kept the policy repo rate unchanged at 6.50% for the tenth consecutive time, with five out of six members voting in favor. This decision, aimed at controlling inflation, marks continuity since the rate was last raised in February 2023.
The RBI maintained its real GDP growth forecast for 2024-25 at 7.2% and projected CPI inflation at 4.5%, unchanged from previous estimates. Governor Shaktikanta Das emphasized the need for caution to prevent inflation from surging again, though a favorable agricultural outlook may help ease food inflation.
In a policy shift, the RBI changed its monetary stance to ‘neutral’ from ‘withdrawal of accommodation.’ Bond yields softened due to factors such as U.S. Federal Reserve actions and India’s fiscal consolidation. The Indian Rupee has remained stable and relatively less volatile.
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Das raised concerns about aggressive growth among certain Non-Banking Financial Companies (NBFCs), warning that excessive risk-taking and high costs could threaten financial stability. He urged NBFCs to self-correct, though the RBI is prepared to intervene if necessary.
The RBI also proposed extending curbs on prepayment penalties to small enterprises and introduced measures to enhance security in fund transfers, expanding verification for NEFT and RTGS transactions.
