Big decisions of RBI: Crackdown on digital fraud, name of Bank-NBFC website to change; three rules postponed till March 2026
New Delhi| Internet domain names of banks and non-banking financial companies (NBFCs) will be changed to curb digital fraud. This change will also change the name of the websites of banks and NBFCs. While banks will have to use Bank.in, NBFCs will have to use Fin.in. A special internet domain will start for banks from April 1. ‘fin dot in’ will also be introduced for NBFCs in the coming time.
Giving information about the decisions taken in the three-day meeting of the Monetary Policy Committee (MPC) on Friday, the new RBI Governor Sanjay Malhotra said, the increase in digital fraud is a matter of concern. Everyone needs to take necessary steps to control this. The objective of this decision is to increase confidence in the financial sector. Rapid digitalization of financial services is providing better facilities to the customers. However, cyber threats and digital risks have also increased. These are increasing every day.
This initiative of RBI aims to reduce cyber security threats and malicious activities like phishing and streamline secure financial services, thereby increasing people’s confidence in digital banking and payment services. The Governor said, the Institute for Development and Research in Banking Technology (IDRBT) will act as the special registrar. Similarly, it has been decided to protect customers of non-financial institutions also. Special domain will be made available for them also. Actual registrations begin April, 2025. Detailed instructions will be issued separately for banks.
There is no danger of inflation increasing due to income tax relief
Providing income tax relief to the middle class in the budget will increase consumption in the country. However, there is no danger of inflation increasing due to increase in consumption, rather it will definitely support economic growth. This budget is excellent from the point of view of both inflation and growth. – Sanjay Malhotra, Governor, RBI
Cross border payments will be more secure, increased customer confidence
RBI has further expanded the scope of security by enabling Additional Factor of Authentication (AFA) in cross-border ‘Card Not Present’ transactions. The introduction of AFA for digital payments has increased the security of transactions, thereby increasing customers’ confidence in digital payments. However, it is mandatory only for domestic transactions.
It is also proposed to enable AFA for international card not present (online) transactions to provide the same level of security in terms of online cross-border transactions using cards issued in India. The draft will be released soon for feedback from shareholders.
Food prices will fall due to falling prices of vegetables in winter and better production of Rabi crops
Retail inflation may decline to 4.2 per cent in the next fiscal year 2025-26 amid expectations of softening food prices. It is estimated to be 4.8 per cent in the current financial year. RBI Governor said, there is no possibility of any shock on the supply route. In view of better production of Kharif crops, falling prices of vegetables in winter and favorable prospects for Rabi crops, there should be a significant decline in food inflation. Although core inflation is expected to increase, it will remain at a moderate level. Vegetables and pulses contributed 32.3 per cent to total inflation in the current financial year till December.
The Governor said, the favorable situation regarding food items and the steps taken in the previous monetary policy reviews continue to have an impact. Retail inflation will gradually come to around the target of four percent.
The RBI forecast retail inflation to be 4.5 per cent in Q1 2025-26, 4 per cent in Q2, 3.8 per cent in Q3 and 4.2 per cent in Q4.
Retail inflation eased to a four-month low of 5.22 percent in December, 2024, as prices of vegetables and other food items plummeted. In November it was 5.48 per cent. Retail inflation had risen to a 14-month high of 6.21 per cent in October.
The RBI Governor said, given the ongoing uncertainty in global financial markets with volatility in energy prices and adverse weather events, the risk of rising inflation remains. Keeping all these things in mind, retail inflation is estimated to be 4.8 percent in the current financial year and 4.4 percent in the fourth quarter of 2024-25.
Rupee: Exchange rate stable for years, no target set
Amid the continuous fall in the rupee, the RBI Governor said, the exchange rate policy has been the same for the last several years. The central bank has not targeted any ‘specific level or scope’ for Rs. The exchange rate of the Indian rupee is determined by market elements. Our aim is to maintain order and stability without compromising market efficiency.
The Governor said, the US dollar has strengthened due to reduced expectations regarding interest rate cuts in America. Returns on bonds have increased. Emerging economies have experienced massive capital withdrawals, leading to sharp declines in their currencies.
The rupee has fallen by about two percent so far this year. The rupee has depreciated 3.2 percent against the dollar since the results of the U.S. presidential election were announced on November 6, 2024.
Three urgent rules postponed until March 31, 2026
To give lenders sufficient time to prepare, RBI has decided to postpone the implementation of three proposed important banking rules till March 31, 2026.
The first was a proposal for stricter rules for lending to infrastructure projects. Second, there was a rule to set aside more for digital deposits and third to plan to introduce a framework for expected credit losses. Due to these rules the government feared that the flow of debt would be affected. The government believed that strict banking rules were responsible for the economic recession. RBI Governor said, we do not want to create any disruption. It will be implemented in a phased manner. We do not want all the criteria to apply simultaneously.
