The Reserve Bank of India (RBI) in its fourth bi-monthly monetary policy meeting conducted today, October 6, announced a few interesting details. The monetary policy meeting (MPC) is a major marker and often impacts the market performance and growth levers going ahead for both residents and NRIs. Here are some of the major takeaways from today’s RBI MPC Meeting in our all you need to know about RBI MPC Meeting takeaways for NRIs.
Also read: RBI Guidelines for NRI Investment in India
What is RBI MPC Meeting?
The RBI MPC (Monetary Policy Committee) meeting is a regular meeting of the Reserve Bank of India’s (RBI) central board, during which the committee reviews the country’s economic conditions and decides on monetary policy actions, such as changes in interest rates. The MPC meeting is held bi-monthly and is chaired by the RBI Governor. The current governor of RBI is Shaktikanta Das. The meeting provides insights into the central bank’s inflation targeting and policy actions and is closely watched by market participants and economists.
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What are the major takeaways from the RBI MPC Meeting?
Here are some of the major takeaways from today’s RBI MPC meeting.
- Unchanged Interest Rates
- RBI has announced an unchanged Repo Rate for the upcoming period at 6.5% while the Standing Deposit Facility (SDF) will also remain at 6.25%. The Marginal Standing Facility (MSF) rate and Bank Rate will be maintained at 6.75% while the CRR will be at 4.5%.
- Hopeful GDP Projections
- RBI in its MPC meeting announced real GDP projection for FY24 at 6.5%. This is retained from the previous MPC meeting. The GDP forecast for Q3 FY24 and Q4 FY24 also remains unchanged at 6% and 5.7% respectively. Also, the GDP forecast for Q1 FY25 also remains unchanged at 6.6%.
- Inflation Projection
- RBI has maintained its CPI inflation target at 5.4% for FY24. However, RBI is determined to bring it to under 4% in the near future.
- Major boost for UCB’s in Gold Loan Limit
- Urban Co-operative Banks (UCB) has been granted an increase in the monetary ceiling of gold loans from INR 2 lakhs to INR 4 lakhs for USBs who have met their overall PSL targets as of 31 March 2023.
- Proposal for Card-on-File Tokenisation
- RBI has proposed a new Card-on-File (CoF) tokenization to enhance the convenience of cardholders. This will allow the cardholders to get tokens and link them to their existing accounts on various e-commerce platforms.
- Framework for SROs for regulated entities
- RBI is earing to issue a framework for the recognition of Self-Regulatory Organisations (SROs) for various regulated entities. This will prescribe the objectives, functions, eligibility criteria, and more for the SROs and will be a common theme irrespective of the sector.
- Credit Concentration Norms
- RBI has permitted Non-Banking Financial Corporations (NBFCs) in the middle and base layer to offset their exposures via eligible credit risk transfer instruments.
Also read: NRI Investment in India: 10 Investment Options for NRIs in India 2023
Noteworthy Mentions:
- RBI is going to issue a comprehensive framework of regulations for projects under implementation for all regulated entities.
- PM Vishwakarma scheme will now be included in the Payments Infrastructure Development Fund (PIDF) scheme while the tenure of the scheme will also be extended till 31 December 2025.
- RBI may also consider open market sales of bonds if required to manage the liquidity conditions to keep in check the inflation objectives.
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What does RBI MPC Meeting Outcome mean for NRIs?
The MPC’s decisions regarding key interest rates, inflation targets, and economic outlook can influence the returns on NRI investments in India, such as fixed deposits and government bonds. With India’s inclusion in the JP Morgan Global EM Bond recently, FII inflows in the debt market will likely increase further. The governor also reiterated that India is poised to become the growth engine ahead signaling a growing economy and opportunity for wealth generation in Indian markets via investments.
Looking to Invest in India as NRI
NRIs can now download the SBNRI App and choose to invest in different investment schemes in India with ease. You can also get detailed mutual fund advice from experts at SBNRI. Also, visit our blog and YouTube channel for more details.
SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.
