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RBI Governor Shaktikanta Das announced several key measures and warnings during the October bi-monthly monetary policy review.

The central bank has increased the UPI Lite wallet limit to Rs 5,000 and the per-transaction limit to Rs 1,000 to encourage wider adoption of the instant payment system. Additionally, the per-transaction limit for UPI 123Pay will be enhanced to Rs 10,000 from the current Rs 5,000.

In a customer-friendly move, the RBI will introduce a beneficiary account name look-up facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems. This facility will allow remitters to verify the name of the beneficiary account holder before initiating a funds transfer, which can increase customer confidence and reduce the possibility of wrong credits and fraud.

The RBI also plans to create a ‘Reserve Bank Climate Risk Information System’ (RB-CRIS) to address climate change risks to the financial system. This data repository will comprise a web-based directory of various data sources and a data portal with datasets accessible to regulated entities in a phased manner.

Governor Das issued a strong warning to non-banking financial companies (NBFCs) pursuing unsustainable practices to push growth. He emphasised the importance of following sustainable business goals, a ‘compliance first’ culture, strong risk management, adherence to the fair practices code, and a sincere approach to customer grievances. The RBI is closely monitoring these areas and will not hesitate to take appropriate action if necessary, he said.

While acknowledging the impressive growth of the NBFC segment and its contribution to financial inclusion, Das expressed concern over some NBFCs pursuing aggressive growth without building sustainable business practices and risk management frameworks. He cautioned against the “growth at any cost” approach and highlighted risks associated with high interest rates, unreasonable processing fees, and frivolous penalties.

The RBI Governor also asked NBFCs to review their staff compensation practices, variable pay, and incentive structures, noting that some appear to be purely target-driven and may result in adverse work culture and poor customer service.

Despite some commentary on stress build-up in unsecured segments, Das assured that the health parameters of banks and NBFCs continue to be strong. However, he advised these institutions to carefully assess their individual exposures in these areas and maintain robust underwriting and monitoring of loans.

(With inputs from PTI)