Saturday, 9 April 2016


Check RBI's first bi-monthly monetary policy statement: Highlights 2016-17 Review in Recent Current Affairs as Banking Current Events for your upcoming recruitment and competitive exams. Reserve Bank of India (RBI),India’s central banking institution, which controls the monetary policy of the Indian rupee announced its First Bi- monthly Policy Rates for the year 2016-17 in Mumbai.

Basic definitions of the Policy Rates are as follows: 
Repo Rate – It is the rate at which RBI lends money to commercial banks.
Reverse Repo rate – It is the rate at which RBI borrows money from commercial banks. Cash Reserve Ratio (CRR) – The share of net demand and time liabilities (deposits) that banks must maintain as cash balance with the Reserve Bank.
Statutory Liquidity Ratio (SLR) – The share of net demand and time liabilities (deposits) that banks must maintain in safe and liquid assets, such as, government securities, cash and gold.

NEW DELHI: Following are the highlights of RBI's first bi-monthly monetary policy statement, 2016-17: 

►Repo rate cut by 0.25% to 6.50% 

►Reverse repo hiked by 0.25% to 6% 

► Cash reserve ratio or CRR unchanged at 4% 

►Minimum daily cash maintenance by banks with RBI cut by 5% 

►MSF rate cut by 0.75% to lower banks' borrowing cost 

►Policy to remain accommodative going forward 

►Pegs 2016-17 growth forecast at 7.6% 

►Expects inflation at around 5% 

►Cut in small savings rate, MCLR introduction to improve monetary policy transmission 

►Government adhering to fiscal consolidation path will help lower inflation 

►7th Pay Commission award to put upward pressure of up to 1.5% on inflation 

►Proposes custodian banks; banks focusing on wholesale and long term financing 

►Second bi-monthly monetary policy on June 7.

Source : Economics Times

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