Room for improvement in ensuring ease of credit, says RBI Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra said that the RBI has always focussed on ease of credit and that there is room for improvement. He added that the RBI will take further steps to ensure ease of credit. The RBI governor was addressing the media along with Finance Minister Nirmala Sitharaman after RBI board meet.

"RBI has focused on ease of credit but more improvement is required in it…there was an initiative which was planned earlier which is about unified lending interface, we will take it ahead. And in what ways and with simplified manner, the regulated entities such as banks, NBFCs that do work in last mile, far-flung areas, and similarly business correspondents of scheduled commercial banks go to villages. How can we make credit more convenient, there is an alertness in efforts and we will give it a further push," said the RBI governor.

The governor assured the stakeholders on the liquidity situation as well.

We have a number of instruments to manage liquidity like OMOs, VRRs and we will use them. We need not be worried on that account, the governor said.

The RBI's Monetary Policy Committee decided to go for a 25 basis points rate cut after holding the rates steady for 11 consecutive times. The repo rate was cut to 6.25% from 6.5% earlier. The move came in the light of the Indian economy slowing down with current fiscal year's growth rate being pegged at 6.4%, according to First Advance Estimates.

The governor acknowledged the slowing growth of the economy and expressed optimism that the rate cut move will help to aid consumption and boost economic growth.

Finance Minister Nirmala Sitharaman said that the monetary and fiscal policies are moving in tandem on the growth and inflation front and will benefit the economy.

The double bonanza for the common man in terms of the Budget tax cuts as well as a reduction in repo rate will help in lifting the sentiment. The finance minister had announced that there won't be any taxes on income of up to Rs 12 lakh a year. The government will forego Rs 1 lakh crore in terms of taxes to provide the much needed relief.

RBI Governor Malhotra also spoke about the falling levels of rupee. He said that the RBI doesn't target any specific levels or band and it only intervenes to stem excessive volatility.

He said that the downward pressure on the rupee is mostly due to the Trump tariff announcements and that it should settle down.

"Most of the rupee's depreciation is due to Trump related tariff announcements and global uncertainties. So hopefully that should settle down and help us with downward movement on rupee," RBI governor said.

In the post policy press conference on February 7, the governor while responding to a question said that the current levels of rupee have been factored in while arriving at the inflation projections.

The RBI pegged the next fiscal's GDP growth at 6.7%, which is at the upper end of the Economic Survey's growth forecast at 6.3-6.8%. The projection for retail inflation was retained at 4.8% for the current fiscal year while it was reduced to 4.2% for FY26.