RBI Policy As It Happened: MPC holds rates; experts see few rate cuts ahead

4:07pm: That brings us to the close of the live blog. Thanks for staying tuned. 4:05pm: In summary, MPC keeps repo rates unchanged, GVA growth at 7.4% for FY18, RBI sets up committee on cyber security, no cash withdrawal limits from March 134:00pm:  We now expect banks to step up lending to the various sub-sectors of the economy as well as meeting requirements of SMEs, says Das3:58: Eco Affairs Secy says budget has announced boost to affordable housing sector3:56pm: Banks have already reduced rates since December 30, says Eco Affairs Secy3:54pm: Economic Affairs Secretary Shaktikanta Das says they expect growrth to revive 3:51pm: Bankers say only minor tweaks in lending rate expected; rates to be stable from now on3:50pm: Leeway to cut deposit rate on retail side is not too high, says Manian3:48pm: A significant amount of transmission on lending rate side has happened, says K V S Manian, President – Corporate, Institutional & Investment Banking, Kotak Mahindra Bank3:47pm: In the future, there could two types of savings account. One where transactions are done and one where money is purely saved, says Bansal3:45pm: There is possibility of banks reducing their savings account interest rates, says IDBI Bank executive director R K Bansal3:44pm: Markets would react bit nervously to this stance and it will correct marginally, to settle around 8500-8600 levels, says Motilal Oswal3:44pm: Motilal Oswal, Chairman & MD, Motilal Oswal Financial Services says cut of 25 bps was widely expected and would have uplifted the sentiments3:40pm: RBI in a release says it will have a separate enforcement department from April 1, 20173:38: RK Bansal, ED, IDBI Bank says CASA deposits are substantial, so banks will be forced to reduce rates3.35 pm: The central bank has put out a release saying it has constituted an inter-disciplinary committee on cyber security."While banks have taken steps to strengthen their defences, the diverse and ingenious nature of recent cyber-attacks necessitates an ongoing review of the cyber security landscape and emerging threats. Towards this end, an inter-disciplinary Standing Committee on Cyber Security is being constituted to:- Review the threats inherent in the existing/emerging technology;- Study adoption of various security standards/protocols;- Interface with stakeholders; and- Suggest appropriate policy interventions to strengthen cyber security and resilience.3.33 pm: If you want to follow the key takeaways from the RBI's monetary policy decision, you can check out our detailed piece here.3.30pm: Following a minor sell-off following the rate decision, equities have recouped their losses at close. The Bank Nifty, too, closed flat.3:19pm: We are done with rate cuts, something dramatic needed on CPI front for any more cuts, says Ananth Narayan.3:15pm: Standard Chartered Bank financial markets head Ananth Narayan says that things are looking unstable globally and some amount of prudence was warranted3:14pm:Bad bank by itself may not necessarily work. Right price for selling to ARCs will be key and if designed properly, it could help, says Acharya. 3:13pm:On the setting up of the bad bank, all options are open, says RBI deputy governor N S Vishwanathan3:09pm:Information on final piece to piece verification of old bank notes will be given in due course, says Mundra3:08pm:Have seen a few stray cases of fraud by bank officials, incidents should not be generalised, says Mundra3:08pm: Important that Bankruptcy code gets operational soon, says Mundra3:07pm: In view of continued uncertainty on global oil prices, rising metal prices and increasing food price index, the committee needed all the flexibility to adapt to any risks arising, says Patel3:03pm:NPA problem in the absolute sense is quite large and requires significant recapiatlisation of banking system and speedy resolution of stressed assets, says Acharya3:02pm:Notes in circulation as on January 27 was Rs 9.91 lakh crore, says Gandhi3:00pm: Full rollout of macro policies is still awaited, says Patel2:58pm:Fake notes are not a real concern currently, says RBI's Gandhi2:57pm:There is still scope for lending rates to come down, says RBI governor2:55pm:We await greater data to know whether impact of demonetisation is truly transient; so we remain flexible, says Acharya2:54pm: We are mainly driven by global inflation concerns on fuel and metals side, says RBI deputy governor Viral Acharya2:53pm:There is a reduction in the percentage of restructured assets, says RBI deputy governor S S Mundra2:52pm:RBI deputy governor R Gandhi says from February 20, cash withdrawal limit from savings account will be RS 50,000 per week. From March 13, no limit on cash withdrawals from savings bank accounts.2:51pm:Assessing economic conditions for short term is difficult due to demonetisation, says Patel.2:50pm:MPC sensitive to the need to have a calibrated movement to CPI inflation target of 4 percent, says Patel2:48pm:In these highly uncerain conditions, MPC exercised abundant prudence in keeping rates on hold, says RBI governor2:46pm:Urjit Patel welcomes deputy governor Viral Acharya to his first monetary policy 2:43pm:  MPC says discretionary consumer demand held back by demonetisation is expected to bounce back in the closing months of 2016-172:42pm:MPC says timely transmission of policy rates to banks lending rates will improve if sector’s NPA resolved more quickly and efficiently2:41pm:RBI says it is committed to ensuring efficient and appropriate liquidity management 2:41pm:Committed to bringing headline inflation closer to 4 percent on a durable basis and in a calibrated manner, says MPC2:41pm: GVA growth for 2017-18 is projected at 7.4 per cent, with risks evenly balanced2:40pm: GVA growth for 2016-17 is projected at 6.9 percent with risks evenly balanced around it2:38pm:MPC says expect growth to recover sharply in FY182:36pm:MPC says persistence of inflation excluding food and fuel could set a floor on further downward movements in headline inflation 2:35pm:MPC says decision is in consonance with objective of achieving consumer price index (CPI) inflation at 5 percent by Q4 of 2016-17 2:30pm:RBI keeps repo rate unchanged at 6.25 percent. The MPC' stance changed from accomodative to neutral. All six members voted unanimously in favour of keeping the rates unchanged.2.27 pm: In a few minutes from now, Reserve Bank of India Governor Urjit R Patel will address the media following the sixth bi-monthly monetary policy where the six-member RBI Monetary Policy Committee (MPC) will decide if there is a need for a revision in the repo rate. 2:25pm:RBI will have more room to reduce benchmark rates following the government's goal to keep the fiscal deficit target at 3.2 percent of the GDP in FY18.

2:20pm: Economists expect a 25 basis points cut in the repo rate with CPI inflation under control.

2:18pm: It is expected to be a close call for the Monetary Policy Committee and RBI Governor Urjit Patel.2:15 pm: Welcome to the live blog for the sixth bi-monthly monetary policy, which will be announced in the next 15 minutes. 

Repo rate, which is the rate at which banks borrow short-term funds from the central bank, now stands at 6.25 percent. Markets expect a 25 basis point rate cut on Wednesday after the MPC surprise December pause and demonetisation.