Reserve Bank of India has kept the key interest rate unchanged for third time in a row. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.5 percent. Repo rate is the rate at which the RBI lends money to commercial banks. Mr Das said, the standing deposit facility (SDF) rate remains at 6.25 percent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. RBI Governor said, the MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth. RBI has revised the CPI inflation target for current fiscal to 5.4 per cent. RBI Governor projected real GDP growth for 2023-24 fiscal at 6.5 percent.
RBI said it will come out with a framework allowing borrowers to switch to fixed interest rate from floating interest rate. The move will provide relief to borrowers of home, auto and other loans. Reserve Bank Governor said, under the framework, to be put in place shortly, the lenders will have to clearly communicate with the borrowers about tenor and EMI. He said, the supervisory reviews undertaken by the Reserve Bank and the feedback and references from members of public have revealed several instances of unreasonable elongation of tenor of floating rate loans by lenders without proper consent and communication to the borrowers.