In a historic move, the Reserve Bank of India (RBI) has announced a 25 basis points cut in the lending rate, reducing it from 6.50% to 6.25%. This decision, marking the first rate cut in nearly five years, was made during Governor Sanjay Malhotra’s inaugural Monetary Policy Committee (MPC) meeting.
Key Announcements by RBI Governor Sanjay Malhotra:
Rate Cut After 5 Years: The interest rate reduction aims to boost economic growth while maintaining financial stability.
Enhanced Cybersecurity Measures: To combat rising cyber threats, RBI has expanded the Additional Factor of Authentication (AFA) for international online payments.
New Domain for Banks & Financial Institutions: An exclusive Bank.in domain for banks will be introduced, with registrations starting in April. This will be followed by Fin.in for the broader financial sector, strengthening security in online transactions.
Forward Contracts for Government Securities: This move will enable long-term investors, such as insurance funds, to manage risks more effectively and improve pricing efficiency in derivatives trading.
Expansion of NDS-OM for Non-Banking Investors: The Negotiated Dealing System – Order Matching (NDS-OM), a platform for trading government securities, will now be accessible to non-banking investors, enhancing secondary market participation.
Review of Trading & Settlement Timings: A working group will be established to evaluate trading market timings regulated by the RBI, with a final report expected by April 30.
Governor Malhotra emphasized the RBI’s commitment to balancing regulation with efficiency while ensuring a secure and robust financial system. The new measures aim to enhance cybersecurity, streamline financial operations, and boost market participation.