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RBI Monetary Policy Views by Mr. Shivaji Thapliyal, Head of Research and Lead Analyst

UPI transaction limits

“The RBI, once again, continues to take incremental steps to enhance the ubiquity of the UPI as a platform for retail digital payments.

Large value retail digital transactions have generally been in the domain of credit cards and hence, it remains to be seen to what extent allowance of higher UPI payments to hospitals and educational institutions would shift transaction value away from credit cards.

Some of the key segments where large value retail digital transactions have generally taken place are travel bookings, including hotel and flight tickets and larger retail transactions, both in e-commerce and offline retail.”

Web aggregation for loan products

“The RBI remains clued in about the goings on in the fintech space and will not allow this space to run un-regulated. The goal is to safeguard the interest of the customer. However, a concomitant outcome of this is that web aggregators may not be allowed to increasingly control the digital lending eco-system in a surreptitious manner.”

Fintech repository/Framework for connected lending

“Connected lending pertains to lending to related parties within the same business group. While on the one hand, the RBI might be seeming to be somewhat more agreeable to allowing business conglomerates to own banking licences, it also feels it is important to, simultaneously, bolster regulations that would disallow conglomerate-owned banks from gaming the system.”

Hedging of foreign exchange derivatives

“The RBI would be conscious of how foreign exchange exposures, especially loan exposures, are unhelpful for banks in times of financial crises, given the INR tends to depreciate over time against foreign currencies. Hence, steps taken to deepen the forex derivative market would, on balance, would create a safer environment for banks in this regard.”

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