Reserve Bank of India (RBI) Governor Sanjay Malhotra expressed strong confidence in India’s economic future, asserting that a growth rate of 7% or higher is both achievable and should be the country’s aspiration.
His comments came after the Monetary Policy Committee (MPC) announced a 25-basis-point cut in the repo rate to 6.25%, marking the first rate adjustment in two years and the first reduction in five years.
“India can achieve a 7% growth rate and above, and we should aspire for that,” Malhotra said during a press briefing on Friday. The RBI has maintained its gross domestic product (GDP) growth projections at 6.6% for the financial year 2024-25 (FY25) and anticipates 6.7% growth for FY26.
RBI Focus On Growth Amidst Decreasing Inflation
Malhotra emphasized that the RBI’s current focus is on boosting economic growth, as inflation has decreased and is expected to continue its downward trend. The Governor reassured that the central bank remains vigilant, proactive, and responsive to changes in the macroeconomic environment.
He also clarified that while price stability is a core mandate under the RBI Act, the prevailing economic conditions allow for greater support for growth. The RBI is working towards aligning inflation with its 4% target.
As of December 2024, Consumer Price Index (CPI)-based inflation stood at 5.2%, while the Wholesale Price Index (WPI) rose to 2.37%, up from 1.89% in November 2024.
Ensuring Consumer Protection & Financial Security
When questioned about bank security and consumer protection, Malhotra reiterated the RBI’s commitment to safeguarding consumers. He stated that any instances of mis-selling by banks would be taken seriously, and the central bank would support efforts to address fraud cases. “The RBI will make every effort to assist in bank fraud cases,” Malhotra assured.
RBI Deputy Governor Swaminathan J further added that many issues are resolved through dialogue with the central bank, and only “rarest of the rare” cases, involving serious violations, are made public. Most supervisory actions are carried out on a bilateral basis, with continuous engagement between the RBI and financial entities.
Upcoming Regulatory Frameworks and Consumer Protection Initiatives
Addressing the Expected Credit Loss framework, Malhotra clarified that it remains a discussion paper, with no official draft released yet. He also stated that new project finance norms are anticipated to be introduced by March 2026.
To protect consumers, the RBI has announced the creation of new web domains for Indian banks and Non-Banking Financial Companies (NBFCs), helping consumers distinguish between official websites and fraudulent ones.
Navigating Global Economic Uncertainty
Acknowledging the impact of global economic volatility, Governor Malhotra highlighted its potential risks to India’s growth.
However, he also pointed to positive developments, including strong manufacturing activity, stable consumption trends, and healthy agricultural and reservoir levels, which foster optimism for India’s economic future.
RBI’s Neutral Stance and Flexibility
Despite global uncertainties, Malhotra emphasized that the RBI’s stance remains neutral, prioritizing policy flexibility to respond swiftly to changing macroeconomic conditions.
The central bank will continue to monitor global developments while ensuring the domestic economy remains resilient and on track for growth.
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