RBI MPC 2024: Here Are The Top 10 Highlights From MPC's December Meeting

TThe RBI on Friday, December 6, decided to keep the Repo Rate unchanged at 6.5 per cent, marking the 11th consecutive halt of resetting the repo rate. RBI Governer Shaktikanta Das highlighted the neutrality of the policy, keeping in mind the existing economic issues.

RBI MPC 2024: Here Are Top 10 Takeaways

Reduction in Cash Reserve Ratio (CRR):

The bank has decided to roll back the CRR by 50 basis points, in two tranches of 25 basis points each. This move will release Rs 1.16 lakh crore in the banking system.

Higher Interest Rates On FCNR (B) Deposits:

RBI has revised interest rate ceilings on Foreign Currency Non-Resident Bank [FCNR(B)] deposits. For maturities of one to three years, rates are capped at ARR (Overnight Alternative Reference Rate) +400 basis points for deposits. For three to five years ARR +500. The limit is enhanced till March 31, 2025. This change will have an impact on foreign capital inflows.

Change In FX-transactions:

FX transactions will now be linked to Bharat Connect (erstwhile Bharat Bill Payment System). The users can now purchase US Dollars against Rupee via non-bank apps and regular banks. FX-Retail is a digital platform for retail banking customers.

Secured Overnight Rupee Rate (SORR) Introduced:

By launching the Secured Overnight Rupee Rate (SORR), there is greater credibility and robustness of interest rate benchmarks. SORR was launched on the recommendation of MIBOR (Mumbai Inter-Bank Offer Rate) Benchmark Review Committee. SORR will be a new benchmark based on secured money markets, including repo rate and TREP (Treasury Bill Repurchase)

Launch of 'Connect 2 Regulate' Initiative

Stakeholders can contribute ideas, case studies, and concept notes on RBI-related issues and topics, under RBI@90 commemorative events.

RBI Podcast

RBI plans to launch podcasts to disseminate information and create awareness about policies and public interest topics.

Expansion Of Collateral-Free Agriculture Loan Limit

RBI has raised the collateral-free agriculture loan limit from Rs1.6 lakh to Rs 2 lakh per borrower.

Pre-Sanction Credit Lines For SFBs

Small Finance Banks (SFBs) have now been permitted to offer pre-sanctioned credit lines via UPI. It will help expand low-ticket, short-tenure credit products to underserved segments.

AI To Detect Mule Accounts Via Mule Hunter.AI

The software is to prevent fraud, with two pilot projects already successful in the pilot project.

FREE-AI

RBI announced the formation of a committee to create a framework for responsible and ethical use of AI, by mitigating algorithmic bias and data privacy concerns in the financial sector.