Part of: GS Prelims and Mains III – Indian Economy – Monetary policy; RBI and Banking
Context:
RBI Governor Shaktikanta Das announced key policy decisions during the third review of the monetary policy since the COVID19 pandemic spread in the country.
Do you know?
Monetary policy is the process by which the RBI controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability.
RBI reviews its monetary policy every two months.
Key highlights:
1. Monetary Policy Committee (MPC) of the RBI decided to
keep the repo rate unchanged at 4 per cent (lowest since it was introduced in 2000)
continue accommodative stance of the monetary policy as long as it is necessary to revive growth and mitigate the impact of the pandemic
2. RBI Governor announced stimulus measures, which included additional special liquidity of Rs 10,000 crore at repo rate to NABARD and NHB.
3. To enhance safety of cheque payments, it has been decided to introduce a mechanism of Positive Pay for all cheques of value ₹50,000 and above.
4. RBI to set up an innovation hub
5. Priority sector lending to be given tostartups also
6. Stressed MSME borrowers will be eligible for debt restructuring
7. RBI to announce additional measures to enhance liquidity support, ease financial stress, improve flow of credit and deepen digital payment system.
