FICCI statement on RBI Monetary Policy

Dec 04, 2020

NEW DELHI, 04 December 2020: Commenting on the RBI monetary policy statement announced earlier today, Dr Sangita Reddy, President, FICCI said, "It is heartening to see RBI confirming that it will maintain an accommodative stance till the time necessary for stabilizing growth on a firm footing. While the inflation trajectory has moved up, at this point in time re-energizing growth should get all the attention. There has been a substantial upgrade to the overall growth forecast for the second half of the current fiscal. This is encouraging but given the stress the economy had faced on account of COVID-19, we anticipate that policy support, both from the RBI and the government, will be required well into the next year." 

Allowing banks to tap into the TLTRO funds for extending credit to other stressed sectors in line with ECLGS 2.0 is a positive move and FICCI welcomes the same. Amongst the other regulatory announcements, the announcement to review the regulatory regime for NBFCs basing it on size, scale and risk profile is a notable development. FICCI NBFC Committee has been engaging with the central bank on this subject and we look forward to the draft circular that will be put out by RBI for public comments. Likewise, announcements pertaining to strengthening of the credit derivatives market and the corporate bond market are welcome and FICCI will offer its feedback on the revised guidelines once issued.  

Digital payments is another area that came in focus in today's policy. RBI has indicated that it will promote common minimum standards of security controls in the area of digital payments. This will improve consumer confidence. Additionally, the decision to allow upward revision in the limit from Rs 2000/- to Rs 5000/- for contactless card transactions and e-mandates for recurring transaction through cards and UPI would enhance customer convenience and FICCI Fintech Committee has been engaging in these areas with the regulator.