The Reserve Bank of India has hiked the policy repo by 50 basis points with immediate effect, taking the rate to 4.9 percent, in order to keep inflation within the target limits.
Significantly, the central bank announced steps to enhance digital payments and boost the credit eco-system by allowing customers to link their credit cards to transact through the UPI platform, improving customer convenience. UPI has become a widely used mode of payment in India and currently facilitates around 595 crore transactions in a month amounting to Rs 10 lakh crore only by linking savings and current accounts through debit cards.
Another key step was doubling the limit on housing loans from cooperative banks and permitting Rural Cooperative Banks (RCB) to finance residential real estate projects to support affordable housing and inclusive growth.