In addition, the time required for cheque clearing will be reduced from the current two working days to just a few hours, dramatically accelerating the entire process.
The Reserve Bank of India (RBI) announced on Thursday an increase in the tax payment limit via UPI from Rs 1 lakh to Rs 5 lakh. In addition to this adjustment, RBI Governor Shaktikanta Das confirmed that the repo rate remains unchanged at 6.5%. The central bank also introduced several key measures aimed at bolstering the digital lending framework, including the establishment of a public repository under a regulated entity.
To enhance the accuracy of credit information, lenders will now be required to report to Credit Information Companies (CIC) on a fortnightly basis. This change is expected to provide borrowers with more timely updates on their credit status. Moreover, the clearing cycle for cheques will be shortened from two working days to just a few hours, streamlining the process significantly.
The RBI’s decision to maintain the benchmark interest rate at 6.5% for the ninth consecutive policy meeting reflects ongoing concerns about inflation, which remains above the RBI’s target. The monetary policy committee, with four out of six members voting to keep the rate unchanged, is expected to retain its “withdrawal of accommodation” stance. The committee’s term concludes in October.
Inflation surged to 5.08% in June, significantly surpassing the RBI’s 4% target, driven in part by rising food prices. Governor Das cautioned against any premature rate cuts, emphasizing the need for continued disinflationary measures to ensure price stability and sustainable growth.
Following the announcement, Indian bonds experienced a decline, with the 10-year yield increasing by 2 basis points to 6.88%. The rupee held steady, but the NSE Nifty 50 Index dropped by up to 0.7%. The RBI’s decision comes amidst global market volatility, influenced by recent actions from central banks in advanced economies, including the Bank of England’s interest rate cut and growing calls for rate reductions by the Federal Reserve to support economic growth.
