India can achieve a 7% growth rate and should aspire for more: Reserve Bank of India (RBI) Governor, Mr. Sanjay Malhotra

Reserve Bank of India (RBI) Governor Mr. Sanjay Malhotra expressed confidence in India's economic growth, stating that a 7% growth rate is achievable and should be a national aspiration. His remarks followed the Monetary Policy Committee's (MPC) decision to cut the repo rate by 25 basis points to 6.25%, marking the first reduction in five years. The RBI maintained its Gross Domestic Product (GDP) projection at 6.6% for FY25 and 6.7% for FY26. He emphasized that the central bank prioritizes growth with inflation declining while maintaining vigilance over macroeconomic shifts. The Consumer Price Index (CPI)-based inflation stood at 5.2% in December 2024, while the Wholesale Price Index (WPI) rose to 2.37%. He reaffirmed that the RBI aims to align inflation with the 4% target while ensuring financial stability and security. 

Addressing financial regulations, he stressed the RBI's commitment to consumer protection, stating that any mis-selling by banks will be taken seriously, and fraud cases will be addressed proactively. RBI Deputy Governor, Mr. Swaminathan J., clarified that most regulatory issues are resolved through bilateral discussions, with only extreme violations being publicly disclosed. Mr. Sanjay Malhotra also highlighted the RBI’s approach to easing compliance costs and ensuring a smooth implementation of new regulations, including the Liquidity Coverage Ratio (LCR) norms. He confirmed that the Expected Credit Loss framework remains under discussion, with new project finance norms expected by March 2026. Additionally, the RBI is launching new web domains for Indian banks and Non-Banking Financial Companies (NBFCs) to prevent fraud. Despite global economic uncertainties, he pointed to positive indicators such as strong manufacturing, stable consumption, and healthy agricultural output, ensuring that the RBI remains flexible in its policy approach. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.