RBI to study SEBI proposal on banks' foray into non-Agri derivatives: Governor Malhotra

Mumbai (Maharashtra) [India], December 5 (ANI): Reserve Bank of India Governor Sanjay Malhotra on Friday said that the central bank will study the pros and cons of the markets regulator Securities and Exchange Board of India's (SEBI) proposal that observed that the banks be allowed to foray into non-agricultural derivatives.
At the post monetary policy meeting press conference, the RBI Governor confirmed that the proposal has come to them just recently.
He also indicated that the Banking Regulation Act may need to be amended for making way for such arrangements for banks.
"That proposal has just recently come to us. We will study that. Under Banking Regulation Act, banks are not allowed to partake in such product/asset class at present. So the current Act may need amendment(s)," the RBI Governor said, responding to a question.
"This issue is not just limited to regulatory aspect. In the past also there had been similar proposal, and it was studied and being concluded that it is not appropriate. Have things changed in the past 8-9 years? We will study that. It will be incorrect on the part of me to give you a firm response without studying the pros and cons of it," he added, speaking in Hindi.
At present, non-agri derivatives are being traded on stock and commodity exchanges in India.
During the press conference he was also asked whether the inflation forecast of 2 per cent for 2025-26 has been estimated taking into account the current Rupee levels, he affirmed in positive.
"We have factored in current levels of rupee in our estimates," while forecasting inflation for 2025-26, the RBI governor said.
He also noted that a 5 per cent of depreciation of Rupee leads to about 35 basis points of inflation. "And on the other hand it also helps exports and GDP growth by about 25 basis points."
On IMF grading India at C on national accounts, RBI Deputy Governor Poonam Gupta said there was no issue on the quality or the sanctity of Indian data, and it was the base year.
Deputy Governor Poonam Gupta believes that with base year revision, IMF would be satisfied on this count.
"As per their taxonomy, they gave taxonomy of A or B to most of the series and only a C to national accounts. When one digs further in the footnotes, its about the base revision, and its not about quality of the data, its not about the sanctity of the numbers that are put out. It's about the base that has been perceived to be outdated. With this revision, I think they would be satisfied on this count," she said at the presser.
On observation of IMF on India's Rupee exchange rate, she said India practices managed floats when it comes to exchange rate and the central bank curbs undue volatility from time to time.
"What IMF does, others do, they exchange rate regimes into three different categories - fixed, floating, and managed float. Only a handful of countries currently have a fixed exchange rate. Most of the advanced economies have free float. And all the emerging markets have shades of managed floats. And this is what India practices. Within the managed float, which is that, RBI tries to curb undue volatility on each side of a reasonable level. IMF looked at the past six months of the data and they found this volatility to be contained in a range that they have in mind. Based on that, they have sub classification which is called 'crawling peg'. I would not read much into it. Just based on the cross country comparison of India having this much volatility compared to some other countries. The fact remains India is a managed float just like most of the emerging markets," she explained.
Earlier today, RBI Governor characterised India's current macroeconomic moment as a "rare goldilocks period", that currently marks high economic growth and exceptionally low inflation.
The remarks came as the Reserve Bank announced its latest monetary policy decision, cutting the repo rate by 25 basis points to 5.25 per cent, after the three-day review meeting that concluded today.
The RBI revised its CPI inflation forecast for 2025-26 to just 2.0 per cent, down from previous estimates.
India's real GDP expanded 8.2 per cent in Q2 2025-26, fuelled by robust consumption and aided by GST rate rationalization exercise of September 2025.
"Growth at 8.0 per cent in H1:2025-26 and inflation at a benign 2.2 per cent present a rare goldilocks period," the Governor said.
Taking all factors into account, the RBI raised its GDP growth projection at 7.3 per cent for the full year, up by half a percentage point.
Given the favourable growth-inflation balance, the MPC unanimously voted for a 25-bps rate cut, maintaining a neutral stance. (ANI)