MPC votes to keep Repo Rate unchanged for the 9th consecutive time

Announcing the third bi-monthly monetary policy of the financial year 2024-25 on 8 August 2024 in Mumbai, Reserve Bank of India (RBI) Governor Shaktikanta Das said that the Monetary Policy Committee (MPC) has voted by a 4:2 majority to keep the policy repo rate unchanged at 6.5% for the ninth consecutive times.

The RBI’s Monetary Policy Committee met on August 6, 7, and 8, 2024. The next meeting will be held on October 7 to 9, 2024.

According to the RBI Act 1934, the Monetary Policy Committee has to meet at least four times in a financial year.

Policy rates and Ratios after the 3rd bi-monthly monetary policy

There have been no changes in the Policy rates and Ratios. They are as follows:

GDP growth forecast for 2024-25  

RBI has not changed its forecast for the Indian economic growth rate for the financial year 2024-25 and expects the Indian GDP to grow by 7.2%.

The growth rate of the Indian economy in 2023-24 was 8.2 per cent.

According to the RBI, the expected quarter-wise growth rate of Indian GDP in 2024-25 are as follows; 

Policy Initiatives Announced by the RBI Governor 

In order to strengthen and develop the banking sector in India, the Governor announced a number of initiatives.

• RBI will launch a Public Repository of Digital Lending Apps deployed by banks and Non-Banking Financial Companies (NBFCs) regulated by RBI.
• The lenders will provide the credit-related information of their borrowers to the Credit Information Companies every fortnight or at shorter intervals. (At present, it is given monthly or at shorter intervals.)
• The maximum amount limit for paying taxes through the Unified Payment Interface (UPI) has been increased from Rs 1 lakh to Rs 5 lakh per transaction. For normal transactions, the maximum limit for UPI  is Rs 1 lakh per day.
• The Cheque Truncation System (CTS) will adopt continuous clearing with on-realisation-settlement, which will enable cheque clearing in a few hours. At present, CTS operates in a batch system, which takes around two working days to clear cheques.

Monetary Policy Committee 

• The government of India set up the Monetary Policy Committee on 29 September 2016 under the provisions of the Reserve Bank of India Act 1934.
• The Monetary Policy Committee (MPC) consists of six members, including the RBI Governor, who is also the head of the MPC.
• The MPC determines the policy interest rate of the RBI in order to achieve the inflation target. 
• The members of the present Monetary Policy Committee are Shaktikanta Das, RBI’s  deputy governor Michael Debabrata Patra and economists- Dr Mridul K. Saggar, Dr Ashima Goyal, Dr Shashanka Bhide and Prof. Jayanth R. Verma,
• The MPC has to meet at least four times in a financial year.
• All the decisions in the Monetary Policy Committee are taken by a simple majority.