The focus of the 2024 RBI Monetary Policy Committee Meeting is to keep the call rate in line with the target. Earlier, tight liquidity was due to delays in government balances and spending. Now, with balanced liquidity, the call rate will remain central, reflecting the 'return to housing' stance.

RBI Governor announced that the repo rate will remain at 6.5% for the eighth review. He said domestic growth is strong but more work needs to be done on inflation. He advised against concluding a recession based on one month's data and highlighted the 3% growth in world trade. The governor also urged banks to utilize their branch network for better deposit mobilization.

Kotak Mahindra Bank's Upasana Bhardwaj said the RBI will likely keep rates steady until inflation trends change, with a possible cut starting in December. RBI's new feature lets UPI users authorize others for transactions, and the UPI limit for tax payments has increased. CRISIL's Dharmakirti Joshi expects RBI to cut rates in October if inflation eases.

While central banks in Canada, Europe and England are cutting rates, the US Federal Reserve has kept its rates steady amid recession fears. In India, future rate cuts will depend on local factors. The RBI may cut rates in late 2024 or early 2025 with food inflation still volatile. India's residential market is booming with strong sales in Q2 2024 and a positive outlook for the festive season.

After RBI kept interest rates unchanged, rate-sensitive stocks faced huge fluctuations. BSE Bankex and Auto indices fell 0.6% early but steadied later. Canara Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank lost between 0.5% and 1%. In reality, Prestige Estate and Sunteck Realty rose, but Shobha and others declined.

Economists expect the MPC to adopt a neutral stance in October and start cutting rates by December if food inflation comes down to more acceptable levels. For now, borrowers face higher interest rates. Inflation declined to 4.75% in July 2024, but food inflation remained high at 8.7%. Currently, benchmark rates are above 8%, while it was around 6.5% in 2021-2022 when the repo rate was 4%.

RBI Governor Shaktikanta Das during the monetary policy review on August 8 urged banks to innovate to attract deposits. He said alternative investments are attracting retail investors, making it harder for banks to get deposits, which could lead to liquidity problems. Innovation in deposit methods is necessary.

India's financial system is strong despite global challenges, but banks face deposit problems due to alternative investments. RBI kept the repo rate at 6.5%, bond yields increased slightly. Foreign exchange reserves reached $675 billion. A new digital loan app Bhandar is proposed. UPI tax payment limit increased to Rs 5 lakh.

RBI Governor Das says the Monetary Policy Committee can ignore temporary higher food prices, but persistent increases cannot be ignored due to potential spillover effects. He emphasized that people understand inflation primarily through food prices, and highlighted the need to closely monitor ongoing food price trends.

Finance Minister Nirmala Sitharaman said that taxes were not increased in the Union Budget 2024 to increase the government's revenue. Speaking to CNBC-TV18, he described the budget as "futuristic" and stressed the government's commitment to capital expenditure until the economic recovery stabilizes.