In a slew of announcements after the repo rate cut, the Reserve Bank of India (RBI), unveiling the monetary policy review, lowered its GDP growth projection, introduced round-the-clock transfers through NEFT and a bill payment system for repeat payments.
Here are the updates:
Repetitive bill payments to be covered under Bharat Bill Payments System
The RBI has decided to cover all repetitive bill payments under the Bharat Bill Payment System (BBPS) and a detailed guideline in this regard will be issued by September-end.
Currently, repetitive bill payments cover five segments — direct-to-home, electricity, gas, telecom and water bills under the BBPS — which is an inter-operable platform.
“In order to leverage the advantages of the BBPS and harness its full potential, it has been decided to permit all categories of billers (except prepaid recharges) who provide for recurring bill payments to participate in BBPS on a voluntary basis,” the RBI said in ‘Statement on Developmental and Regulatory Policies’ post the monetary policy review.
More liquidity taps opened to NBFCs
Governor Shaktikanta Das on Wednesday said the Reserve Bank will not allow any large and systemically important entity from the troubled shadow banking space to collapse.
The comments come at a time when a large number of non-banking financiers and a few housing finance companies are facing severe liquidity issues which have been attributed to their mismanagement of the asset liability mixes.
Mr. Das said the RBI has identified around 50-odd large NBFCs, including some housing finance companies and are being monitored now.
“It is our endeavour to ensure that there is no collapse of any large systemically important NBFCs,” Mr. Das told reporters after announcing the bi-monthly policy review.
24X7 transfers through NEFT from December
The RBI has decided to allow round-the-clock fund transfers through NEFT from December this year in order to promote digital transactions.
The decision, the Reserve Bank of India said, “is expected to revolutionise the retail payments system of the country“.
Currently, the National Electronic Funds Transfer (NEFT) operated by the RBI as a retail payment system is available for customers from 8 am to 7 pm on all working days with the exception of second and fourth Saturdays of a month.
The NEFT system is used for fund transfers up to Rs 2 lakh.
Confident that sagging growth will be taken care of by govt, says Das
Mr. Das said the economy is in the midst of a cyclical slowdown and not a structural one, and exuded confidence of growth reviving soon on the back of cheaper money and likely more government measures.
He expressed confidence that the government will come up with more measures to revive the sagging growth, which dipped to a five-year low of 5.8% for the March quarter and is widely expected to slip further in the June quarter.
At the same time, the MPC lowered its growth forecast to 6.9% now from 7% it had projected in the June policy but Mr. Das made it clear that downward revision is not with a downward risks.
Mr. Das said according to the RBI’s understanding, “the growth slowdown is not structural but cyclical,” and expects growth to revive in the second half.
GDP growth projection lowered
The central bank marginally lowered the GDP growth projection for 2019-20 to 6.9% from 7% forecast in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.
The RBI has cut the repo rate by an unusual 0.35 percentage points to 5.40% in its third monetary policy review for the current financial year.
Repo rate is the rate at which the RBI lends to banks.
Mr. Das said the central bank has lowered the GDP growth forecast owing to demand and investment slowdown, which is causing dampening effect on the growth.
(From PTI)