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The country's largest public sector bank State Bank of India said the monetary policy statement of the RBI reflected India's high growth and low inflation.
Reacting to the central bank maintaining the status quo in the repo rate, SBI Chairman Dinesh Khara said: "Tracking the market expectation of status quo, the monetary policy statement is an affirmation of goldilocks for India with high growth and low inflation in FY25 and FY 26". This is the seventh consecutive meeting that the MPC has maintained a status quo on the repo rate. The repo rate is the interest rate at which banks draw funds from RBI to overcome short-term liquidity mismatches. This was the first monetary policy statement of the current financial year 2024-25. SBI expects consumer confidence in urban areas and increased demand in rural households will grow in the coming days. "Consumer confidence in urban households continues to improve, while rural demand remains upbeat," Khara said. RBI's new initiatives towards deepening of digital payment systems, like cash deposits through UPI and allowing UPI payments through PPI wallets via third-party apps will help with lenders' liquidity issues, Khara added. Today Reserve Bank of India proposed cash deposits in banks through the Unified Payment Interface (UPI) mechanism. RBI has also proposed making UPI payments through Prepaid Payment Instruments (PPI) wallets. "The regulatory policy as usual has continued the deepening of payment systems with new functionalities in UPI. The review of 24/7 payment systems could act as a positive enabler to address fractional liquidity mismatches." The SBI chairman also cheered RBI's decision to allow the trading of sovereign bonds at IFSC. "The trading of sovereign green bonds in IFSC is also a welcome move and will broaden the markets," he asserted. (ANI)
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