The meeting of the six-member panel, earlier scheduled for September 29-October 1, was rescheduled after appointment of independent members was delayed.

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Repo Rate and Reverse Repo Rate

The central bank has kept repo rates unchanged at 4 percent and reverse repo rate at 3.35 percent.

The RBI has cut interest rates by 115 basis points since February when the Covid-19 crisis hit India.

Growth outlook

RBI underscored while COVID-19 remains a threat, the economy is showing signs of improvement.

RBI sees FY21 GDP contracting by 9.5 percent. PMI for September rose to 56.9; the highest since January 2012.

Inflation projection

The RBI said inflation will remain elevated in the September print, but ease gradually towards the target over Q3 and Q4.

24*7 RTGS

RBI Proposes To Start Round-The-Clock Availability Of RTGS Facility.

India to be among very few countries to ensure 24×7 large value payment systems, says Governor Das.

MPM Index

‘Manufacturing purchasing managers’ index (PMI)rose to 56.8 for September 2020, highest since January 2012.

Liquidity measures

The central bank will conduct special and outright bond purchases and announced on-tap TLTRO for Rs 1 lakh crore at 4 percent till March 2021.

Besides, RBI will conduct OMO worth Rs 20,000 crore next week.

The limit for Ways and Means Advances (WMA) for the centre has been kept higher at Rs 1.25 lakh crore compared to Rs 35,000 crore in the second half of the previous year.

Similarly, the 60 percent increase in WMA limit for states in the first half of 2020-21 has been extended for a further period of 6 months till March 31, 2021.

Additional measures

RBI announced certain additional measures intended to:

  • Enhance liquidity support for financial markets;
  • Regulatory support to improve the flow of credit to specific sectors within the ambit of the norms for credit discipline;
  • Deepen financial inclusion and facilitate ease of doing business by upgrading payment system services.
  • Provide a boost to exports;

SLR HTM limit extended

RBI extended the dispensation of the enhanced HTM (Held to Maturity) limit of 22 percent up to March 31, 2022, for securities acquired between September 1, 2020, and March 31, 2021.

Review of the Co-origination Model

Based on the feedback received from stakeholders, it has been decided to extend the scheme to all NBFCs, including HFCs, in respect of all eligible priority sector loans, and allow greater operational flexibility to the lending institutions.

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