New Delhi, February 2024.

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has kept repo rates unchanged at 6.5 percent. It has also decided to remain focused on the withdrawal of the accommodative stance, Governor Shaktikanta Das said. This is the sixth consecutive unchanged decision and comes after the Interim Budget was announced on February 1, 2024.

With RBI's mandatory KFS, multiple hidden costs will be brought to light, says Veefin Solutions MD

RBI MPC Meeting 2024 Live: “We welcome the RBI’s decision to mandate Key Fact Statements (KFS) for all MSME loans. Initially this lack of transparency often led to financial stress and hindered informed decision-making for MSMEs. For example, oftentimes MSMEs have been unaware of charges like foreclosure fees, which can be substantial and significantly impact their bottom line. With KFS, such hidden costs will be brought to light, enabling businesses to make informed decisions and plan their finances accordingly. By requiring lenders to disclose all charges upfront in a standardized format, MSMEs may finally understand the full all-inclusive cost of their loans. This also empowers them to compare offers effectively, negotiate better, and prevent unfavorable circumstances in the future," said Raja Debnath, Managing Director, Veefin Solutions Ltd.

RBI Monetary Policy by “Shanti Ekambaram, Whole-time Director Kotak Mahindra Bank Ltd”

“ In line with the wider expectations, the MPC has maintained the status quo in both the policy rates and the stance of “ withdrawal of accommodation”. Though the CPI is pegged at 5.4% for FY’24, the expectation of inflation at 4.5% for FY’25 comes from the complete transmission of the 250 bps hikes so far, percolating fully into the economy.

The central bank has shown its nimbleness and readiness to tackle the surplus liquidity and reach the long-term objective of inflation at 4% levels on a durable basis. GDP growth is estimated at 7.3% for FY’24 - making it the third consecutive year of > 7% growth. Food remains the major risk element. Next year’s projection of 7% growth also shows the robust growth potential in India, driven by growing physical infrastructure, continued digitization and rising capex besides a steady urban consumption.

Fiscal consolidation cues in the Budget and the financial stability of the economy as seen by external and internal indicators are signs that the central bank may much comfort in. The overall domestic economic outlook exudes immense optimism as India continues to remain the bright spot in the world. ”