RBI Monetary Policy 2024

New Delhi, February 2024

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) kept repo rates unchanged at 6.5% and is focused on the withdrawal of accommodation, Governor Shaktikanta Das said. It projects real GDP growth of 7 percent for FY’25 with risks evenly balanced.

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.

Anu Aggarwal, President & Head Corporate Banking, Kotak Mahindra Bank said, “As the RBI maintains its stance of no change on interest rates for the sixth consecutive policy review, we acknowledge the stability it brings to the financial landscape. The sustained pause in the repo rate is poised to benefit India’s economic trajectory positively. Moreover, the remarkable growth in capital expenditure witnessed in FY24, coupled with robust capex push by the government underscores a pivotal moment for economic resurgence. The capex push also aligns with the broader endeavour to propel India towards achieving its $5 trillion economy milestone.”

Nikhil Gupta, Chief Economist, MOFSL Group

“The RBI has kept monetary policy unchanged, as broadly expected, with no change in interest rates or policy stance (Both with 5-1 voting.) Further, the Governor again emphasized the importance of achieving a 4% inflation target.

The Bank forecasts real GDP growth at 7% in FY25, with inflation at 4.5% vs. 7% and 5.4%, respectively in FY24. (FY25 growth forecast has been revised up, keeping inflation broadly unchanged.)

Overall, there were no major announcements, hinting at an imminent easing. The RBI has been managing daily liquidity with overnight infusion, as and when required. We don’t see easy monetary policy anytime soon, especially with such strong growth.”