Curent AffairsEconomics

Monetary Policy Statement, 2021-22

the Monetary Policy Committee (MPC) at its meeting today (June 4, 2021) decided to

  • keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent.
  • the reverse repo rate under the LAF remains unchanged at 3.35 per cent
  • the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent.
  • The MPC also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.


Additional Measures announced by RBI to revive the economy

    • On-Tap Liquidity Window for Contact-Intensive sectors:
      • A separate liquidity window of Rs. 15,000 Crore is being opened till March 31, 2022 with tenures up to three years, at the repo rate.
      • Under this scheme, Banks can give fresh lending support to Contact-Intensive sectors like hotels, restaurants, travel, rent-a-car service providers and saloons.
    • Special Liquidity Facility of Rs. 16,000 Crore to SIDBI, for on-lending / refinancing through novel models and structures at Repo Rate, for a period of up to one year. This is to further support credit requirements of MSMEs, including those in credit-deficient and aspirational districts.
    • Expansion of coverage of borrowers under Stress Resolution Framework 2.0, by enhancing maximum aggregate exposure threshold from Rs. 25 Crore to Rs. 50 Crore for MSMEs, non-MSME small businesses and loans to individuals for business purposes.
    • Regional Rural Banks can now issue Certificates of Deposit (CDs). Further, all issuers of CDs will be permitted to buy back their CDs before maturity, subject to certain conditions. This will facilitate greater flexibility in liquidity management.
    • National Automated Clearing House (NACH) to be available on all days of the week (currently available only on bank working days), effective from August 1, 2021. NACH is a popular and prominent mode of direct benefit transfer to large number of beneficiaries.

Source – rbi

Tags: Curent Affairs, Economics

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