Tuesday, March 5, 2024
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HomeBusinessRBI Monetary Policy, February 2024: 6 Important Central Bank Announcements You Want...

RBI Monetary Policy, February 2024: 6 Important Central Bank Announcements You Want to Know About

New Delhi: The Reserve Bank of India on Thursday announced that it will keep repo rates unchanged at 6.5 per cent for the sixth consecutive time. This is the first bi-monthly policy after the presentation of the interim budget 2024-25 on February 1 by Finance Minister Nirmala Sitharaman.

Keeping a ‘close watch on inflation’ as RBI Governor Shaktikanta Das discussed the details of the RBI’s Monetary Policy Committee (MPC) decision, the RBI has projected real GDP growth of 7 per cent for FY25.

Here are six important announcements made by central bank governor Shaktikanta Das that you want to know

1. Review of the Regulatory Framework for Electronic Trading Platforms

The RBI will review the regulatory framework for ETPs. The revised regulatory framework will be published separately for public comment.

2. Hedging gold price risk in the OTC market at the IFSC

The RBI has not decided to allow them to also hedge the price of gold in the over-the-counter (OTC) segment of the IFSC. This will provide resident entities with more flexibility and easier access to derivative products to hedge their exposure to gold prices. Related instructions are issued separately.

3. KFS for Loans and Advances for Retailers and MSMEs

The RBI has decided to require all regulated entities (RE) to provide ‘Key Fact Statement’ (KFS) to borrowers for all retail and MSME loans. Providing critical information about the terms of the loan agreement, including the all-inclusive interest cost, will greatly benefit borrowers in making an informed decision.

4. Improve the robustness of AePS

Aadhaar Enabled Payment System (AePS), operated by NPCI, enables customers to carry out digital payment transactions in assisted mode. To improve the security of AePS transactions, it is proposed to streamline the onboarding process, including mandatory due diligence, for AePS touchpoint operators, to be followed by banks.

5. Principles-based framework for authentication of digital payment transactions

Governor Das said that although the RBI has not prescribed any particular additional factor authentication (AFA), the payments ecosystem has largely adopted an SMS-based one-time password (OTP). With technological innovations, alternative authentication mechanisms have emerged in recent years. To facilitate the use of such mechanisms for digital security, it is proposed to adopt a principles-based “Framework for Authentication of Digital Payment Transactions”. Instructions in this regard will be published separately.

6. Introduction of programmability and offline functionality in the CBDC pilot

The CBDC Retail (CBDC-R) pilot currently enables person-to-person (P2P) and person-to-merchant (P2M) transactions using digital rupee wallets provided by pilot banks. It is now proposed to enable additional use cases using programmability and offline functionality, Governor Das said.

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