The last MPC meet appears to have had quite a few verbal duels
The reconstituted MPC, which met from October 7 to 9, had decided to keep the benchmark lending rates unchanged in view of the hardening of retail inflation.
The meeting, which was held through video conferencing, also deliberated on the issues concerning financial stability in the present context.
"We are almost at the doorstep of revival process and it's very important that the financial entities have adequate capital (to support growth)," Das said.
The liquidity measures announced will further improve the liquidity conditions enabling banks, NBFCs to push lending further. But, these measures will help only when there is a pick-up in demand scenario.
RBI Monetary Policy: Here is the full text of RBI Governor Shaktikanta Das's speech
Banks do not want additional non-performing assets (NPAs) to burden their balance sheets further. Already the Indian banking system is saddled with huge amount of sticky loans. Total Gross NPAs stood at 8.5 per cent as on March, 2020.
Delivering a keynote address at ‘Unlock BFSI 2.0’, Reserve Bank of India (RBI) Governor Shaktikanta Das said the central bank will not unwind any measures immediately and will have a very cautious exit plan.
Risk aversion resulting in banks becoming extremely careful while giving fresh loans to borrowers. This is because of the fear that these loans could turn bad in future.
The prolonged lockdown in the backdrop of Covid-19 has caused major losses to businesses across segments.
The auctions would be conducted on August 27, 2020 and September 03, 2020, the RBI said.
For momentum investors/traders these are good time to make quick bucks in stocks, for contra investors/ traders these are good times to sell and yet for those who are conservative may want to wait and watch.
Uncertainty is the biggest challenge right now and a lot depends on COVID-19 vaccine, said Reserve Bank of India (RBI) Governor Shaktikanta Das.
He also emphasised the need to remain watchful and see to it that the momentum in inflation does not get entrenched, given the uncertain inflation outlook.
In this edition of Explained, Moneycontrol's Shraddha Sharma explains what is loan restructuring and why it was a long-pending demand.
We would urge investors to use an uptick in yields as allocation opportunities to fixed income funds across spectrum.
Das said the measures, which got adopted with deep rate cuts, have also ensured faster transmission of the policy rates into the actual lending by banks, in turn helping the economy. At present, the overall excess liquidity is at over Rs 5 lakh crore.
The central bank has also decided to put in place an incentive framework for banks in order to address the regional disparities in the flow of priority sector credit.
Reserve Bank of India’s Governor Shaktikanta Das has announced introduction of an online dispute resolution mechanism for digital payments.
Shaktikanta Das said the additional liquidity will help the non-banking finance companies as well a the housing sector to tide over the crisis caused by COVID-19.
RBI Governor Shaktikanta Das is expected to address the media at 12 pm on August 6.
As per the latest Financial Stability Report (FSR) released by the Reserve Bank, gross non-performing assets of all banks may jump to 12.5 percent by the end of this fiscal under the baseline scenario, from 8.5 percent in March 2020.
In his foreword to the bi-annual Financial Stability Report (FSR), Das said the top priority right now for banks and financial intermediaries should be for augmenting capital levels and improve resilience.
Addressing all the micro and macro details, the RBI governor lists the plans on the best way to go forward
RBI has taken a number of measures to strengthen co-operative banking system, he added.