The Reserve Bank of India (RBI) has announced a series of developmental and regulatory measures covering liquidity, financial markets, regulations, financial inclusion, payment systems, and fintech. Here’s a summary of the key initiatives:
Liquidity and Financial Markets
- Cash Reserve Ratio (CRR) Reduction:
- CRR will be reduced by 50 basis points in two tranches, restoring it to 4% by December 28, 2024.
- This move will release ₹1.16 lakh crore into the banking system.
- Higher Interest Rates for FCNR(B) Deposits:
- Interest rate ceilings for Foreign Currency Non-Resident Bank deposits increased to attract capital inflows, effective until March 31, 2025.
- FX-Retail Platform Expansion:
- FX-Retail platform to be linked with Bharat Connect, improving accessibility for small businesses and individuals.
- Introduction of Secured Overnight Rupee Rate (SORR):
- A new benchmark for rupee interest rates will replace the existing MIBOR, aiming to enhance market credibility.
Regulatory and Communication Initiatives
- ‘Connect 2 Regulate’ Program:
- RBI launches a consultative platform to invite stakeholder ideas and inputs on regulatory topics.
- RBI Podcasts:
- Podcasts to disseminate RBI updates and public awareness information more effectively.
Financial Inclusion and Payment Systems
- Increased Collateral-Free Agricultural Loans:
- The limit for collateral-free loans for farmers raised from ₹1.6 lakh to ₹2 lakh, benefiting small and marginal farmers.
- UPI Pre-Sanctioned Credit Lines for SFBs:
- Small Finance Banks are now permitted to offer pre-approved credit lines through UPI, enhancing financial accessibility.
Fintech and Digital Security
- FREE-AI Framework for Ethical AI Use:
- A committee will develop guidelines for responsible AI adoption in the financial sector, addressing risks like bias and data privacy.
- AI-Based Mule Account Detection:
- The MuleHunter.AITM initiative, an AI model developed by RBI, identifies mule accounts used in financial frauds. Successful pilots with two public sector banks have demonstrated its potential.
These measures aim to strengthen India’s financial ecosystem by improving liquidity, enhancing regulatory processes, supporting financial inclusion, and addressing fintech and digital fraud challenges.
