RBI Monetary Policy (MPC) Meet: Reserve Bank of India Governor Shaktikanta Das made two announcements related to the Unified Payments Interface (UPI) in India, one specific and one with broader ramifications for the online payments ecosystem.
The first announcement Das said is for "enhancing UPI transaction limit for specific categories" such as payments to hospitals and educational institutions from the current ₹1 lakh to ₹5 lakh.
"The limit for various categories of UPI transactions has been reviewed from time to time. It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from ₹1 lakh to ₹5 lakh per transaction. This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes," he said.
Further, in the broader announcement, Das announced the enhancement of the limit in e-Mandates for recurring payments for specified categories.
Thus limits for e-Mandates for making payments of a recurring nature have been raised to ₹1 lakh for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments.
He stated, “E-mandates for making payments of a recurring nature have become popular among customers. Under this framework, an additional factor of authentication (AFA) is currently required for recurring transactions exceeding ₹15,000. It is now proposed to enhance this limit to ₹1 lakh per transaction for recurring payments of mutual fund subscriptions, insurance premium subscriptions, and credit card repayments. This measure will further accelerate the usage of e-mandates.”
The Reserve Bank of India's MPC has kept repo rates unchanged at 6.5 percent, RBI Governor Shaktikanta Das announced on December 8.
“The RBI MPC has decided unanimously to keep the policy repo rate unchanged at 6.50 percent. Consequently, the standing deposit facility (SDF) rate remains at 6.25 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent,” Das said.
“The MPC also decided by a majority of 5 out of 6 members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth,” he added.
Real GDP growth is projected at 7 percent for the current year, FY23-24. CPI inflation is projected at 5.4 percent for FY24.
Experts had anticipated that the central bank would likely keep the short-term interest rate unchanged in its upcoming MPC review this week. This expectation stemmed from India's inflation remaining within a comfortable range and the economy showing accelerated growth.
The RBI has maintained the benchmark policy rate (repo) at the same level for the past four bi-monthly monetary policies. The last adjustment to the repo rate was an increase in February 2023, setting it at 6.5 percent. This adjustment concluded a series of interest rate hikes initiated in May 2022 due to the repercussions of the Russia-Ukraine war and subsequent disruptions in the global supply chain, which led to elevated inflation within the country.
Also Read: RBI MPC Meeting: Repo rate unchanged, growth forecast raised, key highlights of December policy meet
The RBI MPC meeting was held from December 6 to December 8, with Governor Das, leading discussions for the committee. The MPC's primary responsibility is to determine the policy repo rate, aiming to achieve the targeted inflation rate while considering growth objectives.
The RBI MPC consists of six members – both external and RBI officials. Alongside Governor Das, RBI officials are Rajiv Ranjan, serving as Executive Director, and Michael Debabrata Patra, as the Deputy Governor. While Shashanka Bhide, Ashima Goyal, and Jayanth R Varma are the external members.
Das will address a post-policy press conference at noon on December 8.
