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RBI Monetary Policy key takeaways | See need for adjustment in interest rates on small saving schemes, says Shaktikanta Das

Maintaining surplus liquidity for better transmission, says Shaktikanta Das

February 06, 2020 / 04:33 PM IST

The Monetary Policy Committee (MPC) has unveiled its last credit policy for FY20 on February 6. The meet comes in the backdrop of slowing GDP growth and rising inflation.

Here are some of the key takeaways from the policy review:
- RBI keeps repo rate unchanged at 5.15 percent
- To continue accommodative stance as long as it takes
- RBI says economy continues to be weak, output gap remains negative
- MPC says policy space available for future action exists
- Rationalisation of personal income tax rates in the 2020-21 Budget to support domestic demand
Need for adjustment in interest rates on small saving schemes outlined
Pricing of loans by banks for medium enterprises to be linked to an external benchmark effective April 1
Time for restructuring of GST-registered MSME loans extended till December 2020, from March 2020 at present (Read more)
Revised regulations for housing finance companies to be issued
RBI to periodically publish a composite 'Digital Payments Index' (DPI) from July 2020 to capture the extent of digitisation of payments
- Framework for a Self-Regulatory Organisation (SRO) for digital payments to be issued
- Pan India Cheque Truncation System (CTS) to be made operational by September
Extension of date of commencement of commercial operations of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by one year, allowed
- Next meeting of the MPC scheduled during March 31, April 1 and 3

- April-September 2020 GDP growth seen in the range of 5.5-6 percent; October-December growth seen at 6.2 percent
- FY21 GDP growth seen at 6%
RBI Governor Shaktikanta Das says- See growth pickup in FY21 led by private consumption

Also Read RBI Monetary Policy: FY21 GDP growth projected at 6%
- RBI anticipates inflation to remain elevated in the short-run, says overall inflation outlook “remains highly uncertain”
- Q4 FY20 CPI inflation target revised upwards to 6.5 percent
- Consumer inflation for April-September 2020 revised to 5-5.4 percent, the same for October-December period seen at 3.2 percent
- H1 FY21 CPI inflation target raised to 5-5.4 percent from 3.8-4 percent, the same for Q3 seen at 3.2 percent
- In a major shift, RBI to conduct long-term repos starting February 15 fortnight
RBI Governor Shaktikanta Das says
- CPI inflation in December, excluding onions, would have been 5.2 percent- To remain vigilant to potential generalisation of inflation
- Inflation pressures could ease in H2 FY21
- Monetary policy constrained by uncertain inflation outlook