At the first bi-monthly policy meeting the newly formed Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) left the repo rate unchanged and maintained an accommodative monetary policy. The RBI’s accommodating stance was in line with expectations.
However, as he detailed the decisions taken at the MPC meeting, RBI Governor Shaktikanta Das unveiled a number of unconventional measures to boost liquidity and support economic activity while ensuring the smooth running of the economy. record government borrowing program.
In order to facilitate fast and transparent real-time payments for businesses and national institutions, RBI has decided to make the Real Time Gross Settlement (RTGS) system available 24 hours a day, every day starting in December.
In December of last year, RBI made the nationwide 24/7 electronic funds transfer (NEFT) system available.
The RBI has also streamlined the risk weighting on home loans, meaning that all new home loan risk will be tied to the loan-to-value ratio only. This decision will likely make more credit available to borrowers, especially for higher value loans.
Under current regulations, differential risk weights are applicable to individual mortgage loans, depending on the size of the loan as well as the loan-to-value (LTV) ratio.
The Ways & Means Advance (WMA) limit for the Center has been kept at Rs 1.25 lakh crore.
The TLTRO on tap for Rs 1 lakh crore at 4% until March 2021 has been announced. In addition, OMO worth Rs 20,000 crore will be conducted next week.
In a live video, he said that the RBI “will continue the accommodative stance of monetary policy for as long as necessary – at least this fiscal year and next year – to revive growth on a sustainable basis and mitigate the impact of COVID. -19, while ensuring that inflation stays within target going forward. ”RBI will make special and outright bond purchases
Stating that the RBI is ready to take further steps on liquidity, Das announced Rs 1 lakh crore of targeted long-term funds with maturities of up to 3 years from central bank to banks to invest only in government bonds. ‘business, aimed at easing the liquidity crunch. In the enterprises.
RBI will buy bonds issued by state governments in a particular case and also extend until March 31, 2022, its authorization for banks to hold more government bonds without market valuation.
For exporters affected by the pandemic, the RBI has ended the system-based automatic warning to allow them to earn export earnings.