(Image source from: Reuters.com)
RBI hikes the Repo rate by 50 bps: Loan EMIs to go up:- The Reserve Bank of India (RBI) hiked the repo rate by 50 basic points and this is the second increase in the last five weeks. The decision was taken at the conclusion of the Monetary Policy Committee Meeting for three days on June 8th. The repo rate is set at 4.90 percent and the GDP growth project was retained at 7.2 percent. RBI is also focused on the withdrawal of the accommodation to ensure that the inflation remains the same. RBI also revised the upward of the retail inflation forecast to 6.7 percent for 2022-23 which was 5.7 percent earlier. RBI announced that the Russia and Ukraine war has led to the globalization of inflation. All the Central Banks of the globe are reorienting the policies.
With the change in the repo rate, it would have an impact on the home and the car loans. The limits were last fixed in 2011 for the Urban Cooperative Banks and 2009 for the Rural Cooperative Banks. There would be a change in the EMIs after the increase in the repo rate. The Reserve Bank of India also proposed allowing the linking of the credit cards on the UPI platform. RBI also announced to make modifications to the Payments Infrastructure Development Fund (PIDF) scheme. This scheme is under operation from January 2021. RBI has taken steps that are needed for the Indian economy. The stock markets recovered after initial losses.