MPC consists of six members in which three Members from RBI and three are appointed by the Central Government.
Key-decisions taken in MPC meeting
- Policy stance:MPC decided to reduce the policy repo rate by 25 basis points, bringing it down to 6 % with immediate effect.
- The repo rate is the rate at which the RBI lends money to commercial banks, and a cut in this rate is aimed at boosting lending and investment.
- With this decision RBI changed its stance to "accommodative" from "neutral".
- Accommodative stance means RBI may reduce the policy rates to increase the money supply in the economy.
- The decision comes as global economic uncertainty increases due to recent trade tariff tensions, which have affected financial markets worldwide.
- Framework on Co-lending arrangements (CLA): RBI proposed a draft framework for co-lending arrangements between all regulated entities for all loans, priority sector or otherwise.
- Current regulation deals only with priority sector loans between banks and non-banking financial companies.
- UPI limit: National Payments Corporation of India (NPCI) will be empowered to set transaction limits for Unified Payments Interface (UPI) person-to-merchant transactions in consultation with banks and relevant stakeholders.
- Foster innovation: The RBI will make its Regulatory Sandbox framework theme-neutral and 'on-tap'.
