Monetary Policy Key Takeaways: RBI On US Soft Landing, Sluggish Deposits, Hawkish Stance And More
The Reserve Bank of India kept its repo rate unchanged at 6.5% while retaining its FY25 GDP growth at 7.2%.
KEY HIGHLIGHTS
Here's What The RBI Is Worried About | Key Highlights
Banks finding it difficult to raise deposits.
Depositors shifting to alternative investments.
Banks shifting to short-term fundraising.
Liquidity issues will arise for banks.
Bank funds continue to be diverted to speculative trading.
Top-up loans on housing loans are being diverted.
Some institutions not following RBI rules.
Rate Cuts To Be Pushed Back Beyond December 2024: Bank of Baroda
Buoyant growth outlook gives RBI to keep rates elevated till such time that it feels that inflation has subsided on a durable basis, Aditi Gupta, an economist at Bank of Borado said.
"Given the outlook on food prices, especially vegetable prices, we do not expect the RBI to cut rates before Dec’24." There is also a very real possibility that the rate cut could be pushed back even further, Gupta said.
The RBI policy was on expected lines with both rate and stance being retained, Gupta said.
MPC Policy Shows Balance Between Robust Economy And Global Uncertainties: JLL
The status quo for the ninth time demonstrates a careful balance between a robust domestic economy and global uncertainties, according to, Samantak Das, chief economist and head of research at JLL India.
The RBI's intention in keeping rates unchanged is to ensure a stable interest rate environment and price stability in order to achieve sustained growth, he said. "Future rate cuts in India will primarily be influenced by domestic factors."
RBI Will Not Micro-Manage Banks On Mobilising Deposits: Das
The Reserve Bank of India will not micro-manage banks on mobilising deposits and these institutions will have to make their own decision, according to Governor Shaktikanta Das.
It is for banks to make their own decision on mobilising deposits.
Risk management systems in banks have become much more robust.
Don't want to micro-manage banks.
Our supervisors do interact with banks on an ongoing basis on issues like the slow growth of deposits.
It is for banks to take the required measures to bolster deposit growth.
We watch all incoming data from the banking sector.
Wherever required, RBI will take action on banking regulations.
Investors Must Take Own Decisions On Where To Invest: Das
Individuals must make their own decisions on where to invest their money, Governor Shaktikanta Das said amid the SEBI consulting paper to tame the boom in the derivatives space.
The early warning group of RBI has discussed F&O trends with SEBI.
Divergence of growth of deposits and loans can lead to a liquidity management issue.
Not suggesting that people should put more money in deposits rather than equity.
Individuals must make their own decisions on where to invest their money
RBI On House-Hold Saving Losses From F&O
There is a shift of savings from financial to physical savings like realty and there doesn’t seem to be much exposure to equity in household savings, Michael Patra, deputy governor said.
There doesn’t seem to be much exposure to equity in household savings
There is a churn of precautionary savings made during Covid-19
Savings are returning to more normal levels.
There is a shift of savings from financial to physical savings like real estate.
Total household savings has stabilised at 20% after falling for some time
