Bhoomika Singh
As predicted by economists, the Reserve Bank of India’s Monetary Policy Committee (MPC) did not change the repo rate from 6.50 per cent.
Announcing the decision of the MPC after its three-day deliberations, RBI Governor Shaktikanta Das said on Thursday that the committee unanimously decided to keep the repo rate at 6.5 per cent.
Das said taking into account the economic factors, the MPC has predicted GDP growth at 6.5 per cent in FY24. As regards the inflation rate, the MPC forecast was 5.4 per cent for 2023-24 taking into account the various domestic and global factors.
Das also said uncertainty exists due to geopolitical situation, monsoon and others.
Along with that, the MPC has decided to bring in greater transparency in resetting of the interest rate on equated monthly instalments (EMI) for floating interest loans, as Das said.
Announcing the decisions of the MPC, Das said: “It is proposed to put in place a transparent framework for reset of interest rates on floating interest loans.
“The framework will require Regulated Entities to (i) clearly communicate with borrowers for resetting the tenor and/or EMI; (ii) provide options for switching to fixed rate loans or foreclosure of loans; (iii) disclose various charges incidental to the exercise of the options; and (iv) ensure proper communication of key information to borrowers.” These measures will further strengthen consumer protection, he added.
Additionaly, in the meeting only, governor das decided that all scheduled banks should maintain an incremental cash reserve ratio (I-CRR) of 10 per cent on the increase in their net demand and time liabilities (NDTL) between May 19, 2023 and July 28, 2023. According to Das, the measure will take out over Rs one trillion from the system.
