The Reserve Bank of India (RBI) held its Monetary Policy Committee (MPC) meeting, and Governor Shaktikanta Das announced that the repo rate will remain unchanged at 6.5%.
The decision reflects RBI’s ongoing effort to maintain economic stability.
Alongside this, significant measures have been introduced to promote digital payments and improve banking practices.
UPI Lite Limit Increased and New Banking Guidelines
In a move to enhance digital payments, the RBI has raised the limit for UPI Lite wallets from Rs 2,000 to Rs 5,000.
This increase will allow users to make higher-value transactions with ease.
The RBI also proposed raising the transaction limit for select UPI payments.
Additionally, new guidelines were introduced for banks and Non-Banking Financial Companies (NBFCs) regarding non-business floating rate loans.
Banks and NBFCs are now prohibited from charging foreclosure fees or prepayment penalties on these types of loans, providing relief to borrowers.
However, concerns were expressed about the rapid growth of some NBFCs, urging banks to monitor their financial exposure carefully.
Key Takeaways from the Monetary Policy
- Repo rate remains unchanged at 6.5%
- 5 out of 6 MPC members voted to maintain the current rate
- Policy stance shifted to ‘neutral’
- Lower GDP and inflation forecasts for Q2
- Focus on monitoring unsecured loans
- Concerns raised about NBFC growth
- No prepayment penalty on non-business floating loans
- FY25 GDP growth estimate steady at 7.2%, CPI at 4.5%
- Q3 and Q4 FY25 GDP estimates raised to 7.4%
- Q4 FY25 CPI forecast lowered to 4.2%
These decisions aim to support economic growth while ensuring the financial system remains stable.
