The Monetary Policy Committee meeting of the Reserve Bank of India (RBI) has ended today. Central Bank Governor Shaktikanta Das held the press conference and announced the decisions taken by the committee. The country's economy has been affected by the Coronavirus epidemic. In such a situation, announcements made by the central bank are important. This was the first review meeting of the MPC after the presentation of the General Budget 2021-22. The MPC has not changed interest rates in the last three monetary review meetings. The Reserve Bank had last revised the policy rates on 22 May 2020.
RBI Governor Shaktikanta Das thanked the members of the Monetary Policy Committee.
RBI has not made any change in the repo rate. It remains at four percent. The MPC has unanimously taken this decision. That is, customers have not got new relief on EMI or loan interest rates.
Das further said that the reverse repo rate has also been kept constant at 3.35 percent.
With this, it has been decided not to change the bank rate. It stands at 4.25 percent.
The Marginal Standing Facility (MSF) rate is also at 4.25 percent.
Along with this, the central bank has kept the monetary stance ‘liberal’.
The Reserve Bank of India has projected a 10.5 percent increase in the country's GDP in the next financial year 2021-22. In the budget, it was estimated to be 11 percent.
He said that there are signs of recovery in the economy. There has been a significant improvement in the growth outlook. He emphasized that there is a need to continue promoting growth at this time.
Shaktikanta Das said that in the fourth quarter (January-March) of the financial year 2020-21, the inflation rate could be as high as 5.2 percent.
In FY 2021-22, the earlier estimate of a retail inflation rate of 5.8 percent has been revised from 5.2 percent to five percent.
The governor expressed satisfaction that the inflation rate is below the tolerance level of six percent.
Capacity utilization in the manufacturing sector improved to 63.3 percent in the second quarter compared to the first quarter. The figure was 47.3 percent in the first quarter.
Foreign direct investment (FDI) and foreign portfolio investment (FPI) investment have seen an increase in the last few months. This again shows confidence in the domestic economy becoming stronger.
Health and infrastructure has been emphasized in the budget: Shaktikanta Das
Shaktikanta Das said that funds will be available for NBFCs from banks through Targeted Long Term Repo Operations (TLTRO).
A retail direct platform will be launched, giving retail investors direct access to the G-Sec market. Expert panel to be formed to strengthen primary urban cooperative banks: RBI Governor.
Retail investors can now open their accounts directly in central for investment and trading in government securities.
RBI will soon issue guidelines for this process. The RBI chief said that India would join countries where retail investors have direct access to government bonds.
RBI will issue guidelines for outsourcing digital payment systems.
Das said, "We firmly believe that the damage to the economy caused by the coronavirus epidemic will be compensated in FY 2021-22."
The central bank has decided to merge the three existing Ombudsman schemes and create a centralized scheme. It will be launched in June 2021.
He said that the Cash Reserve Ratio (CRR) will be restored in two phases. In the first phase, a CRR of 3.5 percent will be effective from March 27. In the second phase, a CRR of four percent will be applicable from 22 May 2021.
The Reserve Bank said that the Check Truncation System (CTS), currently implemented in the country's major clearinghouses, will be implemented in all branches of the country by September 2021.
Addressing the first monetary policy meeting after the Union Budget 2021, RBI Governor Shaktikanta Das said that around 18,000 banks are still not under the check truncation system.