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He also said that the RBI has proposed to enhance limits of e-mandates for recurring online transactions RBI MPC 2023 LIVE: Reserve Bank of India (RBI) governor Shaktikanta Das on Friday said that the central bank has proposed to enhance the limit of UPI transactions in hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh. He also said that the RBI has proposed to enhance limits of e-mandates for recurring online transactions to Rs 1 lakh per transaction from Rs 15,000 per transaction for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments.
Earlier, Das said that the policy repo rate has been kept unchanged at 6.50 per cent. He said that this decision was taken unanimously by the monetary policy committee (MPC). The central bank also revised its gross domestic product (GDP) growth forecast in its recent MPC meeting.
The RBI boss said that the real GDP growth for 2023-24 is projected at 7 per cent, up from the earlier 6.5 per cent. He added that the GDP growth for Q3 is projected at 6.5 per cent and Q4 is projected at 6 per cent. GDP is likely to grow at 6.7 per cent in Q1 2024, 6.5 per cent in Q2 2024, and 6.4 per cent in Q3 2024.
In October's monetary policy review, the central bank projected Q2 real GDP growth at 6.5 per cent, which was 110 bps lower than the actual number released by the Ministry of Statistics and Programme Implementation (MOSPI).
Moreover, Das said that the consumer price inflation (CPI) was pegged at 5.6 per cent for 2023-24, with Q3 at at 5.6 per cent and Q4 at 5.2 per cent. CPI inflation for Q1 2024 is projected at 5.2 per cent, Q2 at 4 per cent and Q3 at 4.3 per cent. Risks are evenly balanced and that the target of 4 per cent inflation is still far away.
Check latest updates from RBI MPC 2023 at BusinessToday.In:
"The RBI, as expected, has kept the policy rates unchanged along with an optimistic growth forecast for the country, indicating the rate hike cycle has concluded, provided inflation remains in control. This will increase consumer confidence and boost home buying in the coming quarters. We also welcome a unified regulatory framework on connected lending for all regulated entities which will bring transparency and increased trust on digital lending, boosting the sector’s growth while protecting borrowers’ interests. An increase in the e-mandate limit suggests that India is moving towards an increased acceptance of digital payments across sectors."
-- Madhusudan Sharma, Executive Director, Bharat Housing Network, housing credit platform and infrastructure for affordable housing
“The decision of status quo on Policy Rates and stance by MPC is as per our expectations and a welcome move. MPCs emphasis on keeping inflation target at 4% in the long run demonstrates RBI’s commitment to support sustainable growth while maintaining financial stability. Despite global headwinds, RBI has raised GDP forecast to 7% from 6.5% for FY’24 demonstrating confidence in domestic growth levers. RBI would continue to remain watchful and ready to act on evolving domestic and global developments as warranted.”
-- Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank
Also Read: Five factors that could hamper RBI's optimistic GDP forecast for current fiscal and beyond
RBI Governor Shaktikanta Das said in the post-MPC press conference that inflation management "cannot be on autopilot," while warning that CPI inflation numbers could be on the higher side.
“RBI’s decision to hold the repo rate at 6.5% bodes well for Indian Real Estate and its ancillary industries, as it is expected to maintain the ongoing momentum in housing registrations in the final month of the year. With GDP growing at 7.6% in the July to September quarter - faster than the expected rate - Inflation relatively in check, the macro-economic indicators seem healthy enough and should act as an ideal platform for sustained infrastructural and economic growth. We can expect more homebuyers and fence-sitters coming to the fore and fulfilling their property purchases towards the end of this quarter and going into 2024. From a borrowing cost perspective, this move also ensures that homebuyers’ EMIs don’t increase whereas for developers, it doesn’t increase their financial burden owing to the consistent rate of cost of capital.”
-- Anshul Jain, Managing Director, India & Southeast Asia and Head of APAC Tenant Representation, Cushman & Wakefield
"The Reserve Bank of India's decision to maintain unchanged interest rates reflects a cautious approach aimed at stabilizing inflation within the targeted band of 2%-6%. Notably, the RBI governor mentioned a balanced risk outlook, and the projection for Real GDP growth stands at 7% for the current fiscal year, with an anticipated range of 6.4% to 6.9% for the next year. Given these positive and strong economic indicators, the probability of a rate hike in the upcoming MPC review meeting appears negligible. We anticipated that the housing sector, particularly the luxury segment, will continue to thrive amid a well-performing economy and growing purchasing power of the citizens of the country."
-- Ashwin Chadha, CEO, India Sotheby's International Realty
"As anticipated, the RBI continues to keep the repo rate at 6.5%. However, the Indian real estate industry and the economy at large would have greatly benefitted from a rate cut, given that current macro-economic parameters are favourable and the rate has been maintained at 6.5% for the last 3 quarters. This move will keep home loan rates and cost of buying a house on the higher side for consumers and we hope that it does not disrupt homebuyers’ sentiments. With inflation relatively in check, economy growing at a faster than expected pace, reasonably good monsoon, RBI could have opted for a rate cut that would have provided the ideal opportunity to accelerate housing momentum and overall consumer spending, not just positively impacting growth of real estate but other sectors too."
-- Boman Irani, President, CREDAI National
1. UPI payment limits to hospitals and educational institutions increased to Rs 5 lakh from Rs 1 lakh
2. E-mandates for making online recurring transactions increased from Rs 15,000 to Rs 1 lakh for mutual fund subscriptions, insurance subscriptions and credit card transactions, etc
3. Regulatory framework for web aggregation of loan products to increase transparency in digital lending
4. Fintech repository to be operational by April 2024 run by RBI's Innovation Hub. Fintechs are encouraged to provide information voluntarily to this repository
“With a focus on inflation, liquidity & currency management, the repo rate is expected to remain 6.50% for next 6-9 months. The market has realised that the current repo rate is the new normal. With no change in the repo rate, there will be no changes in floating-rate home loans and other advances which are linked to an external rate such as the repo rate. The affordable housing market has already taken some beating due to the prolonged higher repo rate. RBI may still consider deploying different tools in sucking out liquidity from market incase the inflation further shoots up.”
-- Himanshu Panchmatiya - Cofounder - Switch My Loan
The RBI has proposed to enhance limits of e-mandates for recurring online transactions to Rs 1 lakh per transaction from Rs 15,000 per transaction for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments. This will further accelerate the usage of e-mandates: Shaktikanta Das.
The RBI Governor said that it is proposed that UPI transaction limit for payments made to hospitals and educational institutions be enhanced to Rs 5 lakh from the previous Rs 1 lakh.
The central bank has proposed setting up a fintech repository to better understand the fintech ecosystem as more and more banks are partnering with fintech firms, RBI Governor Shaktikanta Das said. He added that this repository will be operationalised by the Reserve Bank Innovation Centre in April 2024 or before that. Fintech firms will be encouraged to provide information to this repository voluntarily, he further noted.
The RBI has decided to lay down a framework for regulation of web aggregation of loan products. This is expected to result in enhanced customer centricity and transparency in digital lending, Shaktikanta Das said.
Net FPI inflows of $24.9 bn upto Dec 6, says Das
Nifty50 reached the 21,000-mark for the first time in early trade amid Governor Shaktikanta Das' MPC decision announcement.
Also Read: Nifty50 claims mt 21,000 for first time, Sensex at new highs
Need to undertake open market operations (OMO) sales has not arised so far: Shaktikanta Das in MPC statement
Central bank reduced balance sheet size to 21.6% in 2023-24 upto December 1, 2023, says Shaktikanta Das
CPI inflation at 5.4 per cent for 2023-24, with Q3 at 5.6 per cent and Q4 at 5.2 per cent. CPI inflation for Q1 2024 is projected at 5.2 per cent, Q2 at 4 per cent and Q3 at 4.3 per cent. Risks are evenly balanced: Shaktikanta Das
Also Read: CPI inflation projected at 5.4% for FY24, says RBI Governor Shaktikanta Das
Shaktikanta Das said that the real GDP growth for 2023-24 is projected at 7 per cent, up from the earlier 6.5 per cent. He added that the GDP growth for Q3 is projected at 6.5 per cent and Q4 is projected at 6 per cent. GDP is likely to grow at 6.7 per cent in Q1 2024, 6.5 per cent in Q2 2024, and 6.4 per cent in Q3 2024.
Also Read: RBI MPC announcements: GDP for 2023-24 projected at 7%, says Shaktikanta Das
The RBI monetary policy committee (MPC) kept the repo rate unchanged at 6.50 per cent. The decision was taken unanimously and the central bank remains focused on the withdrawal of accomodative stance, says Governor Shaktikanta Das.
Also Read: RBI MPC: Governor Shaktikanta Das keeps repo rate unchanged at 6.5% for fifth consecutive time
RBI MPC 2023: Governor Shaktikanta Das announces key monetary policy decisions
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