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The RBI also allowed banks to give loans to Indian companies for the acquisition of another company.
The Reserve Bank of India (RBI) took several major decisions on Wednesday (October 1), which will make it easier and cheaper for companies and common people to take bank loans. At the same time, people’s concern about UPI charge has also been removed. RBI Governor Sanjay Malhotra announced all decisions after the Monetary Policy Committee (MPC) meeting.
RBI’s big decisions taken in MPC
1. Acquisition Loan Easy for Companies
The RBI has now allowed banks to give loans to Indian companies for acquisition (buying a company). It was demanded by the State Bank of India (SBI).
After which RBI will prepare a structure so that banks can easily give such loans. This means that now companies will be able to collect funds easily to buy other companies.
2. Loan limit increased on share-date securities
- Listed date securities: Earlier, the limit to give loans on them was fixed, but now RBI has removed this limit. This will allow banks to give more loans.
- Loans on shares: Till now a person could get a maximum loan of Rs 20 lakh in lieu of shares, which has now been increased to Rs 1 crore.
- IPO Financing: If you want to take a loan for IPO (purchase of shares of new companies), then there was a limit of 10 lakhs earlier, which has now been increased to Rs 25 lakh.
Especially high net worth individuals (HNIS) will benefit from this, as they will now be able to invest more money in the IPO. These changes have come into force from 1 October.
3. Cheap Loan for Infrastructure Projects
RBI has decided to make the loan even cheaper for infrastructure projects. Non-banking financial companies (NBFCs) will be reduced to risk weight on loans given for good quality infrastructure projects. This will make funding easy and inexpensive for such projects.
4. Relief for those taking big loans
In 2016, RBI made a rule, under which it was difficult to give loans to big borrowers with more than Rs 10,000 crore bank exposure. Now this rule has been removed. This will make it easier for big businessmen to get loans and will get more credit in the system.
5. Banks will get time for new rules
The RBI Governor reported that new rules for banks, such as the Expected Credit Los (ECL) framework and Basel 3 Capital Framework 2027 will be applicable. This will give banks enough time to prepare for these changes.
6. UPI will remain free, no charge will be charged
The RBI Governor made it clear that there is no proposal to put any charge on UPI transactions. He said that the government and the RBI want the digital payment to be promoted, so UPI will be kept free. However, he had earlier said that someone takes the cost of UPI, but there will be no change right now.
What will be the effect of RBI decisions?
Experts say that these decisions of RBI will encourage banks to give more loans. This will promote corporate acquisition, participation in IPO and infrastructure projects.
Also, the practice of digital payment will increase further due to UPI’s free being free. These changes are expected to get a new pace to India’s economy, because both businesses and common people will now get loans and financial services easily.
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