RBI keeps key rates unchanged

New Delhi: The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) expectedly voted to keep the benchmark repo and reverse repo rates unchanged at record lows today as the apex bank retained its gross domestic product (GDP) growth target for Asia’s third largest economy at 9.5 per cent in FY 2021-22.

The repo rate stands unchanged at 4% whereas the reverse repo rate remains at 3.35%. The marginal standing facility (MSF) and the Bank Rate also remain unchanged at 4.25%.

The Reserve Bank of India is set to form a panel to study the charges on digital payments which signals that it is not comfortable with the current structure which many believe is expensive given the surge in volume of transactions. It would add features to UPI transactions, which are at the lowest price point, that could further erode the prospects of many fintech players.

Reserve Bank of India Governor Shaktikanta Das today proposed to launch UPI-based payment products for feature phone users. The apex bank chief said that the innovation would leverage products from the RBI’s Regulatory Sandbox on Retail Payments. Additionally, the RBI chief proposed to enable a mechanism of ‘on-device’ wallet in UPI applications. This, he stated, would make the process flow for small-value transactions simpler.

 

NT Bureau