RBI keeps repo rate unchanged at 6 percent, stance stays at 'neutral'

"There can be some dent in the risk appetite among banks to give loans after the issues related to loan fraud were detected, which could add uncertainties to the pace of the near term recovery", said Siddhartha Sanyal, chief India economist at Barclays in Mumbai. It will be interesting to see how the markets respond to it.

"We also recognize that the blockchain technology, or the distributed ledger technology that lies beneath the virtual currencies, has potential benefits for financial inclusion and enhancing the efficiency of the financial system and we also believe that they should be encouraged to exploit beneficially for the economy", Kanungo said.

India's finance minister recently appointed a dedicated panel that was tasked with examining the existing framework of cryptocurrencies and to come up with measures for dealing with the digital assets. GDP growth has been projected to strengthen to 7.4 percent in FY19, from 6.6 percent in 2017-18; 7.3-7.4 percent in H1 and 7.3-7.6 percent in H2, RBI said.

In a bid to protect consumers and curb evils like money laundering, the RBI on Thursday barred all regulated entities, including banks, from dealing in virtual currencies like Bitcoins, following its earlier multiple warnings on their risks.

The growth will accelerate from 7.3-7.4% in first half of 2018-19 to 7.3-7.6% in the second of half of the current fiscal, said the first bi-monthly monetary policy statement for 2018-19. Regulated entities which already provide such services shall exit the relationship within a specified time.

The RBI is also exploring the concept of a fiat digital currency.

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He also noted that the inter-departmental group's report will be submitted by the end of June. In this context, it is surprising how the projection for inflation has been reduced, imparting a dovish tone to the monetary policy statement.

"Though we welcome the status quo, there is possibility for a 25 basis points cut in repo rate as inflation is hovering in the comfortable trajectory", PHD Chamber of Commerce President Anil Khaitan said.

First the government of India worked to ban cash so the people turned to a peer-to-peer currency like bitcoin.

India and Africa could lead the way in the p2p financial revolution. But now, every bank is covered under this ban.

The news renewed concerns that India was moving to impose an outright ban on cryptocurrencies, though a panel formed past year to study potential regulations has yet to release its findings or any proposals. By its own admission, this move is an attempt to ring-fence regulated entities from the risks associated with cryptocurrencies.

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