Reserve Bank of India’s (RBI) former deputy governor R Gandhi has claimed that RBI is expected to continue with its current accommodative stance to maintain sufficient liquidity in the system and monetary policy tightening is several quarters away as the economic revival has not reached the absolute pre-Covid level of 2019-20. He added that RBI will do monetary policy tightening when the economy will be growing sustainably.
Gandhi acknowledged that NBFCs will gradually garner larger banking market share with more technological interventions. He also said low-interest rate regime will continue even though common people suffer due to decreasing deposit rates from banks.
On August 6, 2021, the central bank had kept interest rates unchanged at a record low as it chose to support economic revival over inflation. The six-member Monetary Policy Committee (MPC) voted in favour of retaining the main repurchase rate at 4 per cent but was split on continuing with the lower-for-longer stance.
