RBI’s Sixth Bi-monthly Monetary Policy Review, Key Rates Kept Unchanged

RBI’s Sixth Bi-monthly Monetary Policy Review

 

 

Hello, Readers!

 

 

The Reserve Bank of India has announced the Sixth Bi-monthly Monetary Policy Review 2016-17 on 8th February 2017. RBI didn’t make any changes to the key policy rates, thus, maintained its status quo.

 

The decision of keeping the policy rates unchanged was taken by the Monetary Policy Committee (MPC) categorizing the actual macroeconomic situation of the country.

 

 

 

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The key policy rates got favour of 6-0 votes by Monetary Policy Committee (MPC) of RBI that made a base of taking the decision of keeping the rates unchanged. It was the third unanimous decision in a row since MPC was first set up in September 2016.

 

The members of MPC included Dr. Urjit Patel (RBI Governor), R Gandhi (RBI Deputy Governor), Michael Patra (RBI Executive Director), Chetan Ghate (Professor, Indian Statistical Institute), Professor Pami Dua (Director, Delhi School of Economics), and Ravindra H. Dholakia (Professor, Indian Institute of Management, Ahmedabad).

 

RBI Governors: A complete list of the past and present governors [UPDATED]

 

 

 

 

 The minutes of the MPC meeting will be published by 22nd February 2017 

 

 The next meeting of the MPC is scheduled to be held on 5th and 6th April 2017

 

 

According to MPC, the environment for timely transmission of policy rates to banks’ lending rates will be considerably improved if the following actions could be done: –

 

The Indian Banking sector’s Non-Performing Assets (NPAs) are resolved more quickly and efficiently.

 

Recapitalization of the banking sector is accelerated.

 

The formula for adjustments in the interest rates on small savings schemes to changes in yields on government securities is fully implemented.

 

 

 

 Key Policy Rates after Sixth Bi-monthly Policy Review

No. Instruments Current Rates
1. Repo Rate 6.25% (unchanged)
2. Reverse Repo Rate 5.75% (unchanged)
3. CRR (Cash Reserve Ratio) 4% (unchanged)
4. Bank Rate 6.75% (unchanged)
5. MSF (Marginal Standing Facility) 6.75% (unchanged)
6. SLR (Statutory Liquidity Ratio) 20.75% (unchanged)

 

Read the details of Key Policy Rates - Important Banking Terms!

 

 

In the Sixth Bi-monthly Monetary Policy Meeting of RBI, the following predictions were made: –

 

 

 

Inflation

 

5 percent in Q4 of 2016-17 in December.

 

4% to 4.5% in the first half of 2017-18.

 

4% to 4.5% in the second half of 2017-18.

 

 

 

GDP Growth

 

In the current fiscal – 6.9 percent

 

In 2017-18 – 7.4 percent

 

 

 

Current Account Deficit

 

In 2016-17 – 1% of GDP

 

 

 

Cash withdrawal Limit

 

From 13th March 2017 – No limit on cash withdrawal

 

From 20th February 2017 – Withdrawal limit from saving accounts will be Rs. 50,000 per week

 

 

 

Enforcement Department to Monitor Bank

 

RBI will set up a separate Enforcement Department to effectively monitor bank in case they violate regulations.

 

The process will be starting from 1st April 2017.

 

 

 

Separate Committee on Cyber Security

 

RBI has also proposed to set up a separate committee on cyber security.

 

It will review the threats posed in the existing or emerging technology.

 

It will also study the adoption of various security standards and protocols.

 

It will look at the interface with stakeholders and suggest appropriate policy interventions to strengthen cyber security and resilience.

 

 

 

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In this article, we have wrapped all the important highlights of the sixth bi-monthly policy of RBI. You can also take a look on to the important news and information suggested below: –

 

Union Budget 2017-18 Highlights – Impact, Reviews & Judgement

RBI’s 5th Bi-Monthly Monetary Policy Review, Repo Rates Unchanged [Highlights]

RBI 4th Bi-Monthly Policy Review 2016-17 | Repo Rate Cut by 25 bps

RBI Second Bi-monthly Monetary Policy Statement 2016-17 Highlights & latest news

 

 

If you want to share your views on any of the decision taken in the policy statement, kindly place them in the comment box provided below.

 

Share the information with your friends to make them aware regarding the major economic decision.

 

For more information and latest news related to major national and international happenings, stay tuned with Eduncle via Facebook and YouTube.

 

 

Thank You 

 

 

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