NEFT, RTGS transfer charges to go; ATM fee to be reviewed
MUMBAI: The Reserve Bank of India (RBI) on Thursday (June 6) cut the repo rate by 25 basis points to 5.75 per cent to be the lowest in nine years, even as RBI shifted its stance to accommodative from neutral, thus ruling out a rate hike in the near future despite concerns about slowing growth lurking large.
Naturally, the reverse repo rate under LAF has been moved down to 5.50 per cent, and the marginal standing facility (MSF) rate and bank rate were pegged at 6 per cent.
“On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.75 per cent from 6 per cent with immediate effect,” the RBI said after the second bi-monthly meeting of the MPC for 2019-20.
In a move that is certain to invite in thumbs up from the market, the RBI has also said it was scrapping charges applied to NEFT and RTGS transfers and that it would set up a panel to review the fee charged by banks on ATM withdrawals.
This, according to experts in the industry, would certainly dent the bottom line of many banks at a time when the fee income has been contributing substantially to the earnings of banks
The ATM charges have always been an issue that irked the common man who wanted to keep money in his/her bank and withdraw it only when it is required.
RBI said it was lowering the GDP growth forecast for the financial year 2019-20. The RBI revised the growth forecast from 7.2 per cent to 7 per cent while marginally increasing the forecast for retail inflation to 3 to 3.1 per cent.
“The headline inflation trajectory remains below the target mandated to the MPC even after taking into account the expected transmission of the past two policy rate cuts”, said RBI Governor Shaktikanta Das while briefing the press on the Monetary Policy Committee (MPC) decisions on Thursday.