The Reserve Bank of India (RBI) announced the monetary policy for 2021-22. The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged at 4 percent while maintaining an ‘accommodative stance’ as long as necessary to mitigate the impact of the COVID-19 pandemic, RBI Governor Shaktikanta Das announced Wednesday.
— ReserveBankOfIndia (@RBI) April 7, 2021
Following are the highlights of RBI’s monetary policy for 2021-22:
* RBI keeps policy rate unchanged for the fifth time in a row; repo at 4 pc
* Economic growth projection for current fiscal retained at 10.5 pc
* RBI to maintain accommodative monetary policy stance to support growth, keep inflation at a targeted level
* Says recent surge in COVID-19 infections has created uncertainty over economic recovery, focus be on containing virus spread
* Projects 26.2 pc and 8.3 pc growth in June and September quarters; 5.4 pc and 6.2 pc in December and March quarters respectively
* Retail inflation projection revised to 5 pc in March quarter 2020-21
* Projects retail inflation at 5.2 pc in June and September quarters
* Gains from inflation targeting framework of 4 pc (+/- 2 pc) since 2016 reinforced by the retention of the target and the tolerance band by the government for the next five years
* To ensure ample liquidity in the system so that productive sectors get adequate credit
* Rs 50,000 crore additional liquidity facility to NABARD, NHB and SIDBI for fresh lending
* Will continue to do whatever it takes to preserve stability and to insulate financial firms from global spillovers
* Enhances maximum balance limit at end of the day from Rs 1 lakh to Rs 2 lakh per individual customers of payments banks
* To set up a committee for a comprehensive review of the working of Asset Reconstruction Companies (ARCs).