RBI Monetary Policy Updates: MPC Keeps Policy Rates Unchanged, Stays Accommodative

RBI will continue to do “whatever it takes” to preserve financial stability, RBI Governor Shaktikanta Das said.

• Will continue to insulate financial markets from global spillovers.
• Urge market participants to take heed of actions, communications in balanced manner.

The Reserve Bank of India has decided to accept the recommendations of an advisory committee that reviewed ways and means advance limits to states and union territories. The aggregate ways and means advance limit of all states and UTs will be enhanced to Rs 47,010 crore, an increase of 46%.

• RBI to provide liquidity support of Rs 50,000 crore to all-India financial institutions.
• RBI enhances the maximum end-of-day balance limit for payment banks from Rs 1 lakh/individual to Rs 2 lakh with immediate effect.
• The central bank proposed to constitute a committee to comprehensively review the functioning of asset reconstruction companies.
• RTGS and NEFT membership to be allowed for non-bank payment institutions.
• RBI proposed to make interoperability of full-KYC prepaid payment instruments mandatory.
• Proposal to enhance outstanding deposits in full KYC PPIs from Rs 1 lakh to Rs 2 lakh.

RBI extended the deadline for TLTRO on-tap liquidity scheme to September 30, 2021 from March 31.

In view of success of variable reverse repo rate auctions, RBI has also decided to conduct such auctions of longer tenors, the Governor said. “The amount and tenor of these auctions will be decided later.”

RBI has decided to put in place a secondary market G-sec acquisition programme, RBI Governor Shaktikanta Das said.

• RBI will commit to purchase a definite amount of government securities.
• Endeavour will be to sustain congenial financing conditions.
• Has been decided to announce a G-SAP of Rs 1 lakh crore in Q1FY22