“Both RBI and the government want Banks to focus on core banking,” said Sitharaman, emphasising on the needs for banks to prioritise their vital business.
Joining the FM, RBI governor stated that banks are free to decide rates of interest while highlighting that interest rates on deposits and lending are deregulated.
The meeting took place shortly after the Union Budget for 2024-25 and the Lok Sabha’s passing of the finance bill with some government amendments. Held at the Reserve Bank of India (RBI) office, it included RBI Governor Shaktikanta Das and other board members of the Central Bank.
A review of Budget provisions
The meeting aimed to review budget provisions and the current economic situation in the country.On August 7, Finance Minister Nirmala Sitharaman expressed confidence in the Union Budget, emphasizing the government’s focus on simplifying tax laws and procedures to boost growth and employment. The FM highlighted Prime Minister Narendra Modi’s vision of creating a straightforward, efficient, and fair tax system. Sitharaman noted that the goal has been to ease compliance, reduce taxpayer burden, and ensure transparency.
RBI keeps repo rate unchanged under Modi 3.0
The Union Budget, presented by Sitharaman on July 23, is the first full budget of PM Modi’s third term, following the BJP-led NDA alliance’s third consecutive victory.
On August 8, the RBI decided to keep the repo rate at 6.5 percent for the ninth consecutive time, maintaining stability in its monetary policy despite ongoing inflation concerns. The RBI’s Monetary Policy Committee projects a 7.2 percent economic growth rate for the fiscal year 2024-25.
