News and Updates

Highlights of RBI Monetary Policy Committee (MPC): 06/08/2020

RBI Governor Shaktikanta Das announced today that

• RBI Governor Shaktikanta Das announced today that

• The Repo Rate remains unchanged at 4 percent, with the reverse repo rate remaining unchanged too at 3.35 percent. Alongside this, marginal standing facility (MSF) rate and the bank rate stand at 4.25 percent. That percentage is voted by MPC members anonymously in status quo.
• Loan restructuring for MSME: The RBI recognized the structure of MSME in these hard times to get benefitsin this sector for borrowing the loan in lower interest rate. So now, RBI changes the structure of loan to allow other sectors for the low interest rate loan to help the MSME. The restructuring shall be implemented by March 31,2020. The loan tenure can be increased with the same interest.
• Focus on inflation:In this time the inflation stays high and also affects the economy and people. RBI also said that the GDP growth may remain in a negative zone in this financial year 2020-2021 or may also continue after this F.Y.
• RBI allows to increase the Gold Loan Rate: Increased in the permissible loan against gold ornaments and jewelry items. So, increase in the rate has been noticed from 75 to 90 in non-agricultural purposes. This has affected the shares of Muthoot Finance and Manappuram Finance Limited with a fall around 10%. This relaxation shall continue for the rest of the present financial year.
• Additional special liquidity: A special liquidity amounting to Rs. 10,000 crores shall be given at policy repo rate to NABARD and NGB. This is to include Rs. 5,000 crores to NHB for protecting the housing sector from liquidity disruptions and increase flow of finance to sector through housing finance companies (HFCs)
• RBI introduces more security mechanisms for Cheques above Rs. 50,000 through Positive Pay for prevention of fraud. The cheque shall get processed for payment by the drawee bank, based on information passed on by the customer at the time of issuance of cheque. Such facility was given by the ICICI bank last year in ICICI mobile app.
• Sensex goes up by 362 points, standing at 38,025 and NIFTY goes up by 98 points, now standing at 11,200 – due to RBI’s keeping of the repo rate unchanged.