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Below the Quote on ONDC which can have a longer-term impact on the business model of banks and NBFCs from Mr. Kaushik Mehta, Founder & CEO of Ruloans Distribution Pvt Ltd.

The Reserve Bank of India has taken into cognizance the upside risks to inflation emerging from higher global food prices accruing from adverse climate events and also the recent hardening in crude oil prices. MPC has revised its average inflation forecast to 5.4% in FY24 from 5.1% earlier, due to the sharp rise in vegetable prices in the current quarter and its potential impact on the average inflation in Q2, the forecast of which has been revised sharply to 6.2%.

The central bank has also taken note of the steady if not strong growth undercurrents in the domestic economy as observed from the high-frequency indicators and the healthy industrial performance in the first four months of the current fiscal. It has continued to be optimistic about the growth prospects for the current year and kept it pegged at 6.5%. Given the uncertainty on the inflation front, the possibility of an extended pause on interest rates has been reinforced. In our opinion, any possible rate cut may not materialise before the last quarter of FY24. The liquidity will be slightly tighter than expected in the near term due to the incremental CRR (ICRR) imposition and this may lead to an increase in short-term rates.

Another encouraging development is the decision of the central bank to come out with new steps to facilitate better access to funds to the infrastructure NBFCs (NBFC-IDFs) and the announcement of an open architecture for access to credit in India in the lines of ONDC which can have a longer-term impact on the business model of banks and NBFCs.

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