: RBI keeps policy rates unchanged #FinanceIndia #StockMarketNEWS RBI keeps policy rates unchanged New Delhi, Feb 5 (KNN) Countrys apex bank, the Reserve Bank of India (RBI) on Friday kept the policy

@StockMarketNEWS Tue 09 Feb, 2021

Posted in: #FinanceIndia #StockMarketNEWS

RBI keeps policy rates unchanged #FinanceIndia #StockMarketNEWS
RBI keeps policy rates unchanged New Delhi, Feb 5 (KNN) Countrys apex bank, the Reserve Bank of India (RBI) on Friday kept the policy rates unchanged at 4. 0 per cent.

‘’The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), on the basis of an assessment of the current and evolving macroeconomic situation, has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4. 0 per cent,’’ said RBI.

Consequently, the reverse repo rate under the LAF remains unchanged at 3. 35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4. 25 per cent.

The MPC also decided to continue with the accommodative stance as long as necessary – at least during the current financial year and into the next financial year – to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth, RBI added.

The apex bank also proposed to provide funds from banks under the TLTRO ‘on tap scheme’ to NBFCs for incremental lending to these sectors.

“With a view to support revival of activity in specific stressed sectors that have both backward and forward linkages and have multiplier effects on growth, the RBI had announced the TLTRO on Tap Scheme for banks on October 9, 2020," Das said.

Sectors such as retail, micro, agri, infra, MSME, pharma, and healthcare are eligible for fund deployment under the scheme.

“The Monetary Policy Committee’s sustained accommodative stance is positive from the perspective that RBI is giving utmost priority to growth. Today’s announcements by RBI to provide funds from banks under the TLTRO on tap scheme to NBFCs is a step that would ease liquidity challenges of small and mid-sized NBFCs and incentivize bank credit flows for them, said Prabhat Chaturvedi, CEO, Netafim Agricultural Financing Agency (NAFA).

He also said that allowing banks to permit NBFCs to access these funds for the targeted lending to the desired segments such as the agriculture value chain and MSME would significantly facilitate meeting the objective of inclusive growth.

These NBFCs borrow only for on-lending and hence can act as a force-multiplier and expand the credit reach to various sectors. The relief would improve cash flow and prevent further downslide from hereon. It indicates the willingness of the policymakers to ensure liquidity in the system," he added.