RBI monetary policy: Repo rate, reverse repo rate remain unchanged

The current repo rate is 4 per cent and the reverse repo rate is 3.35 per cent. A status quo is expected to be maintained.

Reserve Bank of India governor Shaktikanta Das on Wednesday announced that the repo rate and the reverse repo rate will remain unchanged. The current repo rate is 4 per cent and the reverse repo rate is 3.35 per cent. The accommodative stance will go on as long as it is needed, "to sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy while ensuring that inflation remains within the target going forward", the governor said. For the fifth time in a row, the policy rates have been kept unchanged.

Economic activities are normalising, rural demands remain buoyant, urban demand has gained traction, the monetary policy committee has noted, Das said.

The committee has also expressed concerns over the fresh surge in the number of Covid-19 infections but hopes the vaccination drive will give a fillip to the growth.

Experts expected "dovish" stance amid the rise in inflation, rise in the number of Covid-19 cases and the imposition of fresh restrictions in some parts of the country. "Given the rise in the spread of coronavirus and the imposition of fresh restrictions to contain the virus spread in the major parts of the country, the RBI is likely to continue with its accommodative monetary policy stance in the upcoming MPC meeting," Brickworks Ratings said in a statement.

The IMF on Tuesday projected an impressive 12.5 per cent growth rate for India in 2021, stronger than that of China. The Washington-based global financial institution, in its annual World Economic Outlook ahead of the annual Spring meeting with the World Bank, said the Indian economy is expected to grow by 6.9 per cent in 2022.

Banks to remain closed for 14 days in April: Check dates here

  • The RBI listed bank holidays are not observed uniformly across the country, and varies from state to state. Only gazetted holidays are observed by banks all over the country

Banks across India will remain closed for a total of 14 days in the coming month of April, according to the Reserve Bank of India (RBI) yearly calendar. Out of these 14 days, 8 are reserved for various festivals and the bank closing day (April 1), and rest are regular holidays (four Sundays and two Saturdays).

Banks will also remain closed from March 27-29, on account of the last Saturday and Holi. Bank branches will remain open on March 31 but regular business won't be carried out on account of it being the last financial day of the year. In Patna, banks will remain closed on March 30 as well; as per the RBI calendar, banks in Patna get a two-day Holi break.

The RBI listed bank holidays are not observed uniformly across the country, and varies from state to state. Only gazetted holidays are observed by banks all over the country. Banks across Guwahati will remain closed for three consecutive days, starting from April 14 till April 16. Banks across Patna will not be doing business for four consecutive days, starting from March 30 to April 2. Customers are advised to check the holiday dates and plan their business accordingly.

Check the dates here:

April 1: Closing of yearly accounts

April 2: Good Friday

April 4: Sunday

April 5: Babu Jagjivan Ram’s Birthday. Banks across Hyderabad will remain closed

April 10: Second Saturday

April 11: Sunday

April 13: Gudhi Padwa/Telugu New Year's Day/Ugadi Festival/Sajibu Nongmapanba (Cheiraoba)/1st Navratra/Baisakhi

April 14: Dr. Babasaheb Ambedkar Jayanti/Tamil New Year's Day/Vishu/Biju Festival/Cheiraoba/Bohag Bihu

April 15: Himachal Day/Bengali New Year’s Day/Bohag Bihu/Sarhul

April 16: Bohag Bihu. Banks across Guwahati, Assam, will remain closed on this day

April 18: Sunday

April 21: Shree Ram Navmi (Chaite Dashain)/Garia Puja

April 24: Fourth Saturday

April 25: Sunday

Remember that bank holidays are not observed by some states and hence may vary as per a specific region or state. According to the RBI calendar, other than four Sundays and two Saturdays, banks will remain closed on gazetted holidays all over the country. As per the central bank's Holiday Calendar for March 2021, banks across different states will be closed for work on March 22, 29 and 30.

During the region-specific holidays, banks of that particular region will remain closed while banks on other regions will remain operational. Though all regular operations will remain closed during these holidays, mobile and internet banking will remain functional on most days. Also, not necessarily ATM machines might disburse cash. So, to avoid such a situation one must keep some cash in case of an emergency.

RBI announces Rs 50,000 crore liquidity support for mutual funds

GUWAHATI: The Reserve Bank of India (RBI) has announced Rs 50,000 crore special liquidity facility for mutual fund on Monday.

The move came days after Franklin Templeton Mutual Fund, one of the largest fund houses in the country decided to shut six debt funds that carried credit risk.

In a statement released on Monday, the Central bank said, “Heightened volatility in capital markets in reaction to COVID-19 has imposed liquidity strains on mutual funds (MFs), which have intensified in the wake of redemption pressures related to closure of some debt MFs and potential contagious effects therefrom. The stress is, however, confined to the high-risk debt MF segment at this stage; the larger industry remains liquid.”

The RBI has stated that it remains vigilant and will take whatever steps are necessary to mitigate the economic impact of COVID-19 and preserve financial stability.

“With a view to easing liquidity pressures on MFs, it has been decided to open a special liquidity facility for mutual funds of ₹ 50,000 crore,” it said.

“Under the SLF-MF, the RBI shall conduct repo operations of 90 days tenor at the fixed repo rate. The SLF-MF is on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday (excluding holidays). The scheme is available from today i.e., April 27, 2020 till May 11, 2020 or up to utilization of the allocated amount, whichever is earlier. The Reserve Bank will review the timeline and amount, depending upon market conditions,” the release further stated.

RBI also said that the funds availed under the SLF-MF shall be used by banks exclusively for meeting the liquidity requirements of MFs.

“Liquidity support availed under the SLF-MF would be eligible to be classified as held to maturity (HTM) even in excess of 25 per cent of total investment permitted to be included in the HTM portfolio. Exposures under this facility will not be reckoned under the Large Exposure Framework (LEF). The face value of securities acquired under the SLF-MF and kept in the HTM category will not be reckoned for computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets. Support extended to MFs under the SLF-MF shall be exempted from banks’ capital market exposure limits.”

 

RBI injects Rs 50,000 crore to boost liquidity; slashes reverse repo rate by 25 bps

GUWAHATI: In a bid to boost liquidity, ensure credit flow and address financial stress of banks amid the coronavirus crisis, the Reserve bank of India announced a slew of fresh measures on Friday.

The central bank will begin giving Rs 50,000 crore through targeted long-term repo operation (TLTRO) to NBFCs and micro-financial institutions for maintaining liquidity, RBI governor Shaktikanta Das said while addressing the media through a video conferencing today.

“RBI has also slashed the reverse repo rate by 25 basis points to 3.75 per cent. This has been done so that banks lend more credit instead of parking it with the central bank. However, there will be no change in the repo rate,” he said.

The central bank has also declared providing Rs 25,000 crore to Nabard, Rs 15,000 crore to SIDBI and Rs 10,000 crore to NHB.

Among other measures, Das said that the 90-day non-performing assets norm would not apply on moratorium granted on existing loans by banks.

The central bank has also brought down the Liquidity Coverage Ratio (LCR) requirement of banks to 80% from 100%. The same will be rolled back in phases by April next year, he added.

Quoting the IMF projections, the RBI Governor said that India is expected to post sharp turnaround in 2021-22.

The IMF projected 1.9% GDP growth for India in the 2020-21 fiscal, which is highest in the G20 nations, Das said.

RBI is monitoring the situation arising out of the pandemic continuously. It is committed to use all its might to deal with the fallout, he said.

This was the second such address by the RBI governor during the lockdown.