RBI Governor Shaktikanta Das warned about a potential surge in food prices, signaling a rise in overall inflation. He highlighted the likelihood of food inflation pushing up the Consumer Price Index (CPI) in November and December, primarily due to increased vegetable prices. Despite these concerns, the Governor expressed optimism regarding the country's economic growth, revising the GDP forecast for the fiscal year 2023-24 from 6.5% to 7%.
The RBI maintained the repo rate at 6.50%, aiming to stabilize borrowing costs. However, the risk of food inflation remains a significant factor that could contribute to an increase in CPI inflation, which stood at 4.87% in October 2023.
While the GDP forecast was revised upwards, uncertainties persist in the global economy, prompting the RBI to adopt a cautious or "hawkish" stance in its monetary policy.
Additionally, the RBI introduced several initiatives, including a unified framework for forex derivatives, promoting collective lending among regulated entities, and creating a fintech repository for industry-wide data. These initiatives are set to be formalized by April 2024.
To facilitate digital transactions, the RBI also increased the transaction limits for certain categories. The limit for educational and hospital transactions using the Unified Payments Interface (UPI) has been raised to Rs 5 lakh from the previous Rs 1 lakh. Moreover, recurring e-payment mandates for mutual fund transactions, insurance premiums, and credit card repayments have been increased to Rs 1 lakh from Rs 15,000.
In response to the growing digitalization of banking, the RBI plans to implement a cloud facility to secure the data of banks and Non-Banking Financial Companies (NBFCs). These measures aim to bolster the security of financial transactions in an increasingly digitized landscape.
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