RBI MPC highlights: Rates, stance unchanged, CRR to be restored, and more

The Reserve Bank of India Monetary Policy Committee on Friday unanimously voted to keep the repo rate unchanged. RBI Governor Shaktikanta Das said that the central bank would continue its accommodative stance for as long as required. 

Here are the highlights of the RBI Policy review:
  • MPC has unilaterally decided to keep the policy rate unchanged at 4%
  • Accommodative stance to continue for now
  • Reverse repo rate unchanged at 3.35%
  • MSF and bank rate unchanged at 4,25%
  • Stable near-term outlook on account of inflation being in control
  • Given that inflation has come within the tolerance band, MPC decided to prioritise growth
  • 2020 tested our endurance, while 2021 is setting the stage for a new economic era in our history
  • Consumer confidence is reviving
  • 2021 has started on a positive note with vaccination drive providing an impetus
  • The flow of financial resources to commercial sector is increasing
  • FDI and FPI flows into India have increased in recent months reflecting the faith reposed in India by the world
  • Real GDP growth projected at 10.5% in 2021-22
  • Investment-oriented stimulus given under Atmanirbhar Bharat have begun to show results.
  • Projected increase in capital expenditure augur well for the economy
  • After breaching the upper threshold continuously since June 2020, CPI-based inflation came below 6%.
  • Vegetable prices are expected to remain soft in the coming months
  • Projection for CPI-based inflation revised to 5.2% for Q4 of FY21, for H1 of FY22 at 5% to 5.2%, and for Q3 of FY22 at 4.3%
  • RBI ensured smooth transmission of its rate cuts
  • The RBI's stance of liquidity management continues to be accommodative and will remain so as long as necessary
  • RBI has proactively taken steps to insulate domestic financial markets from global stress and unpredictability
  • RBI will ensure the govt's Rs 12-trillion market borrowing programme in a smooth manner
  • The TLTRO on-tap scheme announced for banks earlier extended to NBFCs
  • Access to funds for banks under MSF extended by six months beyond March-end
  • HTM limits would be restored in a phased manner from quarter ending June 2023
  • Banks to be incentivised for extending new MSME loans
  • Retail investors can open Gilt accounts with RBI
  • CRR to be restored gradually to 3.5% in March, and 4 % in May
  • Resident individuals can make remittance to IFSCs for NRIs
  • RBI's Retail Direct facility to allow retail investors access to G-secs, both in the primary and secondary markets; Roadmap to be announced later
  • One nation, one ombudsman: To make ombudsman scheme more efficient, a central integrated ombudsman scheme to be rolled out for redress of grievances from June 2021

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