MUMBAI: India’s central bank and regulatory body RBI. In its monetary policy announcement in October 2021. The Monetary Policy Committee (MPC) has decided to maintain the status quo and keep the repo rate unchanged at 4.0 per cent while the reverse repo rate will continue to be 3.35 per cent. Keeping in mind the impact of COVID 19 on the Indian Economy and mitigate its effects. The MPC statement says that. “The central bank has also decided to continue with the accommodative stance as long as necessary to revive and sustain growth, while also ensuring that inflation remains within the target limit”.
The RBI MPC has also increased the limit for IMPS transactions to Rs. 5 lakh, from the earlier limit of Rs. 2 lakh. This is for the domestic transactions and is for the ease of customers. Immediate Payment Service (IMPS) is an instant payment inter-bank electronic funds transfer system managed by National Payments Corporation of India (NPCI). It is built on the National Financial Switch network. Following are the reactions from India Inc.’s corporate leadership,
Ashok Mohanani – President, NAREDCO Maharashtra
“The economic growth needs to be supported through monetary policy and this is the foremost reason that the RBI has continued its accommodative stance. We have seen a revival in real estate and related sectors because of the rising vaccination numbers. Also, the interest rates will continue to be at a record low for some time. Therefore, this is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low-interest rates.”
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.
“On expected lines, MPC has continued to reaffirm its commitment to an accommodative policy till we witness the emergence of a broad-based and durable domestic economic recovery. While there have been no changes in any of the benchmark rates whatsoever, the central bank has indicated its willingness to make a ‘gradual’ adjustment to the excess liquidity in the monetary system which currently stands at over Rs 9 Lakh Cr. The existing 14-day VRRR auction will be stepped up with the auction amount set to increase by Rs 1-2 Lakh Cr over the next 2 months, reaching up to Rs 6 Lakh Cr by Dec’21. Further, RBI may also consider the introduction of a 28-day VRRR, if necessary to further calibrate the liquidity levels. Importantly, the G-SAP programme to purchase govt securities from the market has been ceased for now to ensure that there is no further infusion of liquidity.
Shraddha Kedia-Agarwal, Director, Transcon Developer
”RBI maintaining status quo on key policy rates was expected to maintain the financial stability before the festive season. The all-time low-interest rates have already given a boost to the real estate sector up ticking the demand in the last few quarters and enhancing the confidence of the homebuyers. It has also helped the sector to regain its strength as well as stay afloat during these unprecedented times. The Government’s favourable policy measures along with festive deals will help sustain the demand during the festive season.”
Dr (PhD) Malcolm Athaide CEO and co-founder Agrim Housing Finance.
The RBI kept the repo rate and reverse repo rate unchanged for the eighth consecutive time, to propel growth when vaccinations has caught up and people livelihoods are returning to normal. The key announcements of Retail Digital Payment Solutions in Offline Mode where internet connectivity is either absent or barely available; and the regulatory sandbox for ‘Prevention and Mitigation of Financial Frauds’ would increase the trust factor, strengthen fraud governance and improve the access to finance to our customer segment – informal and self-employed customers. The message from RBI is that “although the pandemic protocols do us part, technology ties us together”.
Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI MCHI
“We welcome the RBIs decision to continue with their accommodative stance ahead of the festive season. The rising vaccinations should lead to the opening up of the contact-intensive services sector which were hit hard by the virus. The low-interest rates have been a crucial factor in the revival of the demand in the real estate sector. Also, the reduction in home loan-interest rates by leading banks for a limited period has extended the best buying opportunity for the homebuyers. The buyers are already coming back to the market and we feel that the upcoming festive season will be a lot better than the previous years. For the next few days, the buyers can swoop in on good deals on the back of rock-bottom interest rates on home loans along with festive offers from good developers on the eve of expected price rise.”
Sandeep Runwal – Managing Director, Runwal Group and President – Elect, NAREDCO Maharashtra
“The RBI has always taken a proactive stance to ensure liquidity in the past few months since Covid. It is imperative that low mortgage rates would continue for at least some more time now or maybe until the end of the year. The end-user interest has increased mostly due to the all-time low home loan interest rate regime which has provided the required fuel for the growth of the economy along with the real estate industry with which several other allied sectors are linked. Apart from the low interest rates, the consumers’ realization of owning a home along with key policy measures have been the growth drivers for the real estate sector in the past few quarters and the strong demand is expected to continue in the festive season as well.”
Cherag Ramakrishnan, Managing Director, CR Realty
“This approach is extremely productive and industry – friendly. Specially the interest rate -sensitive sectors like Realty will benefit immensely from not only all – time low – interest rates but also high levels of liquidity that the Central bank has allowed the banks to maintain.”
Ramani Sastri – Chairman & MD, Sterling Developers Pvt. Ltd.
“The RBI’s approach to continue with the status quo is on expected lines to enable the growth momentum that seems to have set in during the last couple of months. For home buyers, this decision will help reinstate confidence and further access to affordable home loans. It also goes without saying that the real estate industry’s perennial hope is fixed on lower interest rates as it improves affordability. Home loan interest rates have already gone down substantially in the recent past, and are presently at an all-time low and property prices have been stable. Hence this is the right time for prospective home buyers to invest.”
Himanshu Jain, VP – Sales, Marketing and CRM, Satellite Developers Pvt. Ltd.
“Repo rate cuts have been kept unchanged by the RBI to sustain the financial stability and boost demand during the ongoing festive season. The current scenario offers excellent investment opportunities in the residential segment as affordability is at an all-time high. With the banks and financial institutions further slashing the interest rates, it will provide a much-needed fillip to the real estate sales in the festive season.”
Lincoln Bennet Rodrigues, Chairman & Founder, The Bennet and Bernard Company
“RBI maintaining status quo on key policy rates was expected given the inflationary concerns in recent months and also maintaining financial stability and boost demand during the ongoing festive season. Residential demand is reviving in the pandemic context and this needs to be fostered. We have already seen early signs of improvement in economic activity following the easing of restrictions post the peaking of the second wave. Given the upcoming festive season, which is considered auspicious by a large number of Indians to make big-ticket purchases, the timing of a reduction in interest rate by banks recently couldn’t have been better and will lead to a substantial increase in sales. The low-interest rate regime is going to be a game-changer for the whole real estate sector especially at a time when the economy is on a recovery trail.”
Vinay Kedia – Director, Prescon Group
“The RBI and the government have been implementing a number of measures to help the real estate sector. Although the low – interest rates will provide sustained growth for the real estate sector, developers’ focus on project completion and delivery will be the key factors driving the real estate demand going forward. Homebuyers should take advantage of the current scenario as many major banks and housing finance organisations are offering low-interest home loans owing to the festive season ahead.”
Bhushan Nemlekar, Director, Sumit Woods Limited
“On an expected line, the monetary policy committee (MPC) has kept the repo rate unchanged with an extended accommodative stance for the eighth consecutive times that will continue to serve the markets well in the festive season. The prevailing low home loan rates are already enticing for homebuyers which have immensely benefited the real estate sector. The record low interest together with the festive deals will encourage the consumers to proceed with their purchase and quickly close their transactions.”
Sanjeev Chandiramani, Chief Operating Officer, Ruparel Realty
“By holding the Repo Rate at 4%, the RBI has once again demonstrated its support towards businesses that drive economic growth of the country. These measures will enhance homebuyer’s confidence, which will aid in the industry’s revival. Lower home loan rates will inspire people to pursue their goals of owning a home and will keep them motivated even in these challenging times. However, now is the moment to realize the sector’s true potential by addressing some of the pending requests, such as single-window clearance, which will simplify the regulatory structure. Furthermore, we would like the government to assist the sector by addressing requests for industry status, the need for Input Tax Credit, and a Stamp Duty reduction which would help in gaining high momentum while putting the real estate sector on a high paced growth trajectory.”
Anand Kumar Bajaj, MD & CEO, PayNearby
“IMPS started with Rs 5 lakh limit but the limit was reduced to Rs 2 lakh because of delayed settlement on next day as the beneficiary bank would suffer float loss. Now that there are multiple IMPS settlements in a day, RBI’s move will help people using NEFT for transactions over Rs 2 lakh, move to IMPS because NEFT transactions still takes half an hour. While largely P2P transactions were taking place on IMPS the increase in limit may result in lot of B2B payments gaining speed too. We can see RBI unifying and optimising the payment infrastructure limits appropriately with the increase in the limit of various payment platforms and hope the Domestic Remittance limit for poor will also be revised from the year 2011 limit of 25,000 to 50,000 now to catch up with inflation.”