New Delhi: The Reserve Bank of India on Friday decided to keep the policy rate unchanged for the 11th time in a row.
The MPC also decided to continue with the neutral stance of monetary policy as it provides flexibility to monitor the progress and outlook on disinflation and growth and to act appropriately. The MPC remains unambiguously focused on a durable alignment of inflation with the target, while supporting growth.
3 members of the MPC including Governor Das voted to keep the policy repo rate unchanged at 6.50 per cent. 2 members voted to reduce the policy repo rate by 25 basis points.
Reserve Bank’s December 2024 Monetary Policy: Following are the highlights
– Key interest rate (repo) kept unchanged at 6.5 percent
– RBI continues with ‘neutral’ monetary policy stance
– Cash Reserve Ratio (CRR) reduced to 4 percent from 4.5 percent, to unlock Rs 1.16 lakh crore of bank funds
– RBI sharply lowers GDP growth forecast for FY25 to 6.6 percent from 7.2 percent
– Inflation projection for FY25 raised to 4.8 percent from 4.5 percent
– Collateral-free loan for agriculture sector raised to Rs 2 lakh per borrower from Rs 1.6 lakh
– Interest rate ceiling on FCNR (B) deposits raised. Accordingly, with effect from today (December 6, 2024), banks are permitted to raise fresh FCNR(B) – deposits of 1 year to less than 3 years maturity at rates not exceeding ARR plus 400 bps and deposits with maturity between 3 to 5 years at rates not exceeding ARR plus 500 bps. This relaxation will be available till March 31, 2025
– Introduction of the Secured Overnight Rupee Rate (SORR) – a benchmark based on the secured money markets
– Small finance banks permitted to extend pre-sanctioned credit lines through UPI
– RBI to launch podcasts for wider dissemination of information to general public
– RBI to set up an expert panel to develop a framework for responsible, ethical use of AI in the financial sector
– Next monetary policy meeting scheduled for February 5-7, 2025
