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  • RBI Keeps Repo Rate Unchanged: MPC December 2023 Meeting Highlights

RBI Keeps Repo Rate Unchanged: MPC December 2023 Meeting Highlights

  • 11 Dec 2023
  • 3 mins read
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On 8th December 2023, the RBI, in its Monetary Policy Committee (MPC) meeting revealed that it will maintain the status quo and keep the repo rate unchanged at 6.50%. The RBI governor also said the stance will remain on withdrawal of accommodation.

The rationale for the decision to keep the repo rate unchanged for the fifth consecutive term stems from the CPI headline inflation, which saw a decline to 4.9% in October from 7.4% in July, signifying the effective control of inflation thanks to current measures.

In addition to its unanimous stance on the repo rate, the committee also revealed its GDP growth projection, which is 7% for FY24 with 6.5% and 6% in the third and fourth quarters, and 6.7%, 6.5%, and 6.4% in the first three quarters of FY25. The Central Bank of India also maintained its inflation projection at 5.4% for FY24. 

To eliminate issues in credit management and compromise in pricing stemming from connected lending, the RBI plans to issue a unified regulatory framework for all the regulated entities. 

The RBI will also issue a regulatory framework for WALP (Web-Aggregation of Loan Products). This comes after it accepted the need for it via a circular released in 2022. Through a comprehensive framework, the RBI aims to enhance customer focus and operational transparency in WALP and enable informed decision-making among consumers.

The Central Bank also proposed an enhancement in the UPI transaction limit for transfers made to educational institutes and hospitals. The limit will be increased to ₹5 lac from ₹1 lac. This move aims to encourage digital payments via UPI for these services. 

In terms of recurring online payments, the limit of e-mandates that can be processed without AFA (Additional Factor Authentication) was ₹15,000 as of June 2022. In today’s MCP meeting, RBI proposed that this limit be extended to ₹1 lac for mutual fund subscriptions, insurance premium payments, and credit card bill payments. This proposition aims to boost customer convenience as these amounts are generally over ₹15,000.

The RBI also announced its plan to establish a cloud facility for financial institutions to enhance privacy and data security. The move is also expected to help facilitate business continuity and scalability. The facility will be initially operated and set up by Indian Financial Technology & Allied Services and later transferred to another entity owned by participants in the financial sector. 

By April 2024, the RBI proposed the establishment of a repository operationalised by the Reserve Bank Innovation Hub, which will contain crucial details about Indian FinTechs to facilitate a better understanding of the developments in the ecosystem and offer adequate policy support.

In the post-policy conference, the RBI Governor Shaktikanta Das also said that inflation is a top priority, and its management cannot be on autopilot. Das also emphasised on MPC taking proactive measures to achieve the inflation target. Lastly, the governor said that the Indian rupee’s stability reflects on improving macroeconomic fundamentals and the nation’s resilience in the face of formidable global tsunamis. Das also mentioned a growing international confidence in the country’s potential.



  • 11 Dec 2023
  • 3 mins read
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