RBI MPC: Policy rate unchanged to growth outlook, 10 key highlights from MPC

RBI MPC Highlights: The Reserve Bank of India ( RBI ) Monetary Policy Committee (MPC) meeting today kept the repo rate unchanged at 6.5 per cent. With key decisions aimed at sustaining the workings of the economy against changing challenges, the MPC focused on interest rates, inflation, and growth projections.

Here are the top ten takeaways from the meeting:

Repo Rate Unchanged: The RBI kept the repo rate unchanged at 6.5 percent for a 10th consecutive time with a 5 to 1 majority.

Change of Stance:  The RBI MPC changed its stance from 'withdrawal of accommodation' to 'neutral', signaling perhaps that the central bank may cut the rate going forward.

Inflation Forecast Kept Unchanged: The inflation forecast for FY25 remained at 4.5 per cent, with a commentary that food inflation is likely to ease in the last quarter of the fiscal.

GDP Growth Estimate Left Unchanged: The RBI kept its estimate of FY25 GDP growth intact at 7.2 per cent and, through quarterly projections, indicated minor adjustments to the same.

Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR): CRR remains unchanged at 4.5 per cent, and SLR at 18 per cent as well. These two critical indicators remain unchanged.

UPI Limits Hiked: RBI has increased the UPI123Pay transaction limit from Rs 5,000 to Rs 10,000 and increased the wallet limits for UPI Lite to give more impetus to digital payments.

Loan Guidance for MSEs Enhanced: The new guidance shall ensure that the banks do not impose foreclosure charges on floating rate term loans disbursed to micro and small enterprises (MSEs).

UCBs Discussion Paper: The RBI proposes to issue a discussion paper on the capital raising options for Urban Cooperative Banks to increase their financial flexibility.

Climate Risk Data Initiative: An advanced Reserve Bank – Climate Risk Information System, RB-CRIS will be developed to provide the services relating to climate risk assessment for improving data availability.

Beneficiary Account Name Verification: The RBI is going to introduce a facility of name lookup facility on the RTGS and NEFT systems so that the remitters, before making a remittance, can check if the beneficiary's account holder name is correct or not to cut down the risk of frauds happening.