RBI MPC highlights: UPI transaction limit raised to Rs 5 lakh for tax payments; cheque clearing time to be reduced, says RBI Governor

The RBI Governor Shaktikanta Das proposed to transition CTS from the current approach of batch processing to continuous clearing.

RBI Governor Shaktikanta Das said on August 8 that the Monetary Policy Committee (MPC) has decided to keep the benchmark interest rate unchanged at 6.5 percent for ninth time in a row.

Here are the highlights from Das' speech:

* RBI-led MPC decided by 4:2 to keep repo rate unchanged at 6.5 percent. The MPC decided by 4:2 to stay focused on withdrawal of accommodation, said Das.

*Pace of disinflation is uneven and slow, still some distance to cover to reach target, said Das at a post-MPC meet press conference.

* "It is premature to call a recession. We will be watchful of data. Today, India has improved its resilient for external shocks, we have to wait for data."

* "On deposit rates, it is entirely the banks' decision and it will vary from banks to banks. And all we have said is to utilize your branch network to mobilise deposits."

* Resilient and steady growth in GDP enables monetary policy to focus on inflation, said Das.

*The mismatch in deposit and credit growth may create liquidity issues.

* Without price stability high growth cannot be sustained..

* Inflation broadly on declining trajectory.

* In Q3, substantial advantage of base effect may pull down overall inflation, said Das.

* RBI Governor projected retail inflation at 4.5 percent during FY25 assuming normal monsoon. A degree of relief in retail inflation is expected from pickup in southwest monsoon, he said.

* RBI keeps growth projection unchanged at 7.2 percent for current financial year.

*Banks should mobilise more household financial savings..

* MPC cannot afford to look through persistently high food inflation as it may spillover, cannot and should not become complacent because core inflation has fallen considerably.

* Decline in deposits may expose banks to structural liquidity issues; banks should be careful.

* Expect current account deficit to remain manageable.

* Indian financial system remains resilient, gaining strength from broader macroeconomic stability.

* MPC has to be vigilant as country is witnessing persistently high food inflation: RBI Governor.

* RBI will continue to be nimble and flexible in liquidity management operations.

* RBI Governor Shaktikanta Das expressed concern over rising disbursals of top-up home loans, asked lenders to take remedial actions.

* Inflation and growth evolving in balanced manner, though we need to remain vigilant on food prices front.

* RBI raises frequency of reporting of banks to Credit Information Companies to a fortnight, as against once a month currently.

*Real GDP growth for 2024-25 is projected at 7.2 percent with Q1 at 7.1 percent, Q2 at 7.2 percent, Q3 at 7.3 percent, and Q4 at 7.2 percent. Real GDP growth for Q1 of 2025-26 is projected at 7.2 percent.

Shaktikanta Das announced five additional measures:

1. Public repository of digital lending app: RBI has taken many measures for this ecosystem. More so, RBI proposes to create a public repository under a regulated entity, said Das.

2. Accurate credit info is key, Lenders report this to CIC every month. Now, this is to be done on fortnightly basis or at a shorter notice. Borrowers will benefit from faster update of their credit info.

3. RBI raises tax payment limit through UPI from Rs 1 lakh to Rs 5 lakh.

4. Propose delegated payment through UPI.

5. The clearing cycle of cheques is to be reduced from present two working days. Now, cheques will be cleared within few hours of being presented.