RBI policy meet: Small finance banks can use rupee interest derivative product, says governor

The Reserve Bank of India (RBI) Governor Shaktikanta Das on April 5 said the central bank allowed small finance banks to use rupee derivative product to hedge interest risks.

Prior to this, small finance banks were permitted to use only interest rate futures for hedging. Sharing the monetary policy meeting outcome, Das said the bank would allow further flexibility to small finance banks to hedge their interest rate risk and enhance their resilience. Follow our live blog for the latest on RBI policy meet

The central bank will release a circular in this shortly, governor said.

The MPC left the key repo rate unchanged at 6.5 percent for the seventh time in a row, in line with the market expectations, with its focus firmly on bringing inflation down. It also left the stance unchanged as withdrawal of accommodation. The decisions were takes with a 5:1 majority.

The RBI Governor also announced that there will be no changes in the GDP growth forecast for FY25. The GDP growth estimate was retained at 7 percent for the current fiscal year. On the inflation front, the RBI MPC sees it at 4.5 percent for FY25.