Bounce rates or the share of failed auto-debit transactions in value terms declined to 21.47% in September from 21.74% in the previous month despite rising inflationary pressures.

In volume terms, bounce rates fell to 29.27% in September, compared with 29.48% in August, according to data released by the National Payments Corporation of India (NPCI).

The percentage of failed auto-debit requests out of the total requests that go through the National Automated Clearing House (NACH) platform are typically called bounce rates. The platform facilitates interbank, repetitive and bulk transactions such as salary payments, subsidies, interest payments or periodic payments such as EMI, mutual fund investments and insurance premium.

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Of 111 million debit requests made in September, 32.6 million bounced – of the total requests made for Rs 1.05 trillion, declines were to the tune of Rs 22,630 crore.

The headline inflation for September increased to 7.4% compared with 7.0% in August, with prices of items such as clothing, footwear, vegetables, spices and personal care products remaining elevated. This is the ninth month in a row that inflation was above the RBI’s tolerance band. Inflation is unlikely to come down any time soon as prices of certain food products are likely to stay elevated due to lower kharif output, Madan Sabnavis, chief economist at Bank of Baroda, said.

The Reserve Bank of India (RBI) has projected to bring down inflation within its tolerance limit of 2-6% by Q4FY23. The central bank in its monetary policy meeting gave a guidance for retail inflation at 6.7% in FY23. The print for Q2 was 7.1% which will moderate to to 6.5% in Q3 and 5.8% in Q4.  

The index of industrial production registered contraction of 0.8% in August due to decline in export-oriented sectors such as textile, apparel and chemical products. The effects of global slowdown and fall in rural income because of uneven monsoon could weigh on domestic demand, Dharmakirti Joshi, chief economist at Crisil, said.