Mumbai, November 9 (Language) Reserve Bank of India Governor Shaktikanta Das said on Thursday that the central bank is completely alert and the stance of monetary policy is to support economic growth and control inflation.
The government has given the responsibility to the Central Bank to keep the consumer price index based inflation at four percent with a variation of two percent.
Referring to the RBI’s financial technology (Fin Tech) environment at a seminar in Tokyo, Das said it is customer centric.
He said the focus is on ensuring better governance arrangements, effective oversight, ethically appropriate activities and risk management and encouraging self-regulation of fintechs through Self-Regulatory Organization (SRO).
Das said the Monetary Policy Committee (MPC) in its October meeting has estimated retail inflation at 5.4 per cent for 2023-24, which is lower than 6.7 per cent for 2022-23.
Consumer price index-based inflation fell to a three-month low in September. Inflation data for the month of October will be released on November 13.
However, headline inflation remains sensitive to food price shocks, he said. At the same time, core inflation has come down to 1.70 percent after reaching its high level in January 2023.
“In these circumstances, the monetary policy stance remains cautious and is working towards bringing down prices to keep inflation in line with the target while supporting economic growth,” the RBI Governor said.
The Monetary Policy Committee (MPC) kept the key policy rate repo unchanged at 6.5 per cent in its bi-monthly monetary policy review in October. This was the fourth consecutive time that no change was made in the repo rate. The next MPC meeting is scheduled to be held in early December.
Das also said that Unified Payments Interface (UPI) has played an unprecedented role in the fintech revolution in India.
He said its success story has truly become an international model. Its ability to instantly transfer money between bank accounts through ‘mobile applications’ has changed the way people conduct digital transactions.
“Apart from this, work is also underway to link UPI with faster payment systems of other countries,” Das said while addressing the Indian Institute of Economic Studies’ seminar on Indian economy at the Tokyo Chamber of Commerce and Industry in Tokyo, Japan. . “The possibility of linking the faster payment systems of India and Japan can be explored to leverage fintech and make cross-border payments more efficient and cheaper.”
On the performance of the Indian economy, Das said it is ‘a matter of satisfaction’ that it has grown smoothly despite the ups and downs in recent years.
“The policy measures, with their inherent strength and wisdom, are providing momentum and strength to growth,” he said. Besides, inflation is also coming under control. Our economic performance has been better since the pandemic period on the basis of thoughtful measures and appropriate monetary and fiscal policies.
However, Das also said that there is no scope for complacency in the current uncertain environment.