RBI Monetary Policy: RBI did not make any changes in the key policy rate in the bi-monthly monetary policy review and kept the repo at 4 per cent. However, there have been many announcements to increase the convenience for the common people. Know the big announcements made in this big meeting of RBI in 10 points ..
The six-member Monetary Policy Committee (MPC-Monetary Policy Committee), headed by Reserve Bank of India (RBI) Governor Shaktikant Das, has pronounced the decision on interest rates. The RBI did not make any changes in the key policy rate in the bi-monthly monetary policy review and kept the repo at 4 per cent. However, there have been many announcements to increase the convenience for the common people. Know the big announcements made in this big meeting of RBI in 10 points ..
This was the 27th meeting of the six-member Monetary Policy Committee. It is Ashima Goyal, Jayant R Verma and Shashank Bhide (external members), Dr. Mridul K. Sagar, Dr. Michael Debavrat Patra and Shaktikanta Das. This three-day meeting of the committee started on February 3. The next meeting of the Monetary Policy Committee will be held on 5-7 April 2021.
1. No change in interest rates
RBI has not made any change in interest rates. After this decision, the repo rate will remain at 4 percent while the reverse repo rate will remain at 3.35 percent. Repo is the rate at which the central bank lends one day to commercial banks. The reverse repo rate is the rate at which banks keep their deposits with the central bank.
2. Check Truncation System (CTS) in all branches by September
The Reserve Bank of India (RBI) today said that the Check Truncation System will be operational by September 2021 in branches of all banks of the country. The CTS is currently operational in the country’s premier clearinghouses. While announcing the Monetary Policy Meeting for the first time after Budget 2021, RBI Governor Shaktikanta Das said, “Around 18,000 banks are still not under the check truncation system.”
3. 24-hour helpline for digital payment
According to the RBI statement, several security measures have been taken in view of the increasing digital payments in the country. Emphasis has been laid on setting up a 24-hour helpline under the central bank’s payment system approach document, which will address questions related to customers’ various digital payments.
4. Common people will also be able to open an account with the Reserve Bank
The RBI governor announced that now retail investors can open their accounts directly with the central bank to purchase government securities. Now retail investors (retail investors) will be able to buy government bonds directly through ‘RetailDirect’. Through this platform, investors will be able to open their accounts and take part in the primary and secondary G-Securities market. The Reserve Bank is going to give retail investors direct access to the government securities market, India will be one of the few countries to do so.
5. GDP growth to be 10.5 percent
The Reserve Bank of India (RBI) in its bi-monthly monetary policy review on Friday estimated GDP growth for the next fiscal year starting April 1 to be 10.5 per cent. This estimate is in line with the possibility expressed in the Union Budget.
6. Inflation will decrease
Regarding inflation, RBI Governor Shaktikanta Das said that prices of vegetables are expected to remain soft in the near future. In view of this, retail inflation is likely to come down to 5.2 per cent in the current quarter. At the same time, in the third quarter of the next financial year 2021-22, it can be reduced to 4.3 percent.
7. NBFC to be covered by On Tap TLTRO
The Reserve Bank has also proposed to provide funds to banks under the Long-Term Targeted Repo Facility (TLTRO) to provide loans to non-banking financial sector companies (NBFCs) to the distressed sector.
8. Banks will get relief from Kovid-19 crisis
The RBI statement also talks of bringing the Cash Reserve Ratio (CRR) to the previous level in two phases. In the first phase, a CRR of 3.5 percent will be effective from March 27. In the second phase, CRR of 4 percent will be applicable from May 22, 2021. The CRR was reduced by 1 per cent to 3 per cent to give banks relief from the problem created by the Kovid-19 crisis. This system, implemented on March 28, 2020, was for one year till March 26, 2021.
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9. Demand in villages expected to remain strong
Given the better prospects in the agricultural sector, demand in the villages is expected to remain strong. With the reduction of Kovid-19 cases and vaccination campaign, demand is likely to be good in cities too, which will accelerate the growth. Confidence in consumers is increasing and expectations regarding trade in manufacturing, service and infrastructure sector are encouraging. Apart from this, with the government’s announcement under self-reliant India two and three, public investment will be accelerated by the schemes. However, private investment remains slow with low capacity utilization.
10. Three bids received for PMC Bank
RBI Governor said that three bids have been received for PMC Bank, evaluation is going on. Das said, in the financial year 2021-22, the government’s Rs 12 lakh crore market debt raising program will be completed without any panic, the RBI is confident.
