The Reserve Bank of India (RBI) has decided to keep the interest rates intact. The decision was taken in the three-day Monetary Policy Committee meeting. RBI Governor Shaktikanta Das gave this information on Friday. Shaktikanta Das said the RBI will maintain a conservative stance to sustain growth.
Repo Rate 4.00%
Reverse Repo Rate 3.35%
Marginal Standing Facility Rate 4.25%
Bank Rate 4.25%
The RBI governor said that the recent reduction in inflation has left some room. Support from all stakeholders at the policy level is essential to achieve growth momentum. Normal monsoon will help in economic recovery. Shaktikanta Das also said that the RBI has reduced the economic growth forecast to 9.5% in the current financial year. Earlier, RBI had projected a growth of 10.5%. RBI has projected retail inflation to be 5.1% in the financial year 2021-22.
Shaktikanta Das said that RBI will buy G-Securities (Government Securities) worth Rs 40,000 crore on June 17 to support the economy. G-Securities worth Rs 1.20 lakh crore will be bought in the second quarter. RBI Governor said that India's foreign capital reserves can cross $ 600 billion. The MPC has set a target of maintaining the annual inflation rate at 4% till March 31, 2026.
Governor Shaktikanta Das said that in view of the second wave of Corona, a special loan window is being opened for the hospitality sector. Under this, a loan of Rs 15,000 crore will be given till March 31, 2022. The scheme covers travel agents, tour operators, adventure-heritage services providers, aviation sector ground handling and supply chain services, private bus operators, car repair services, car rentals, event organizers, spas. Clinics, and beauty parlor operators can take loans. Under this scheme, the loan will be given at the repo rate for a maximum period of three years. Apart from this, 16 thousand crore rupees will be made available to SIDBI for giving loans.
The Monetary Policy Committee (MPC) panel in its last meeting held in April 2021 also did not change the rates. This time also there has been no change in the interest rates. This is the sixth time in a row that the key RBI rates have been retained at the current levels. In 2020, the RBI had cut 115 basis points.
The Reserve Bank has reduced the rates many times, but the banks do not pass on the full benefit to the customers. Since the last corona till now, the Reserve Bank has cut rates by more than 1.50%. However, the interest rates on loans are historically lowest at this time. Same is the case with your bank deposits as well. The lowest interest is getting on that too.
MPC consists of 6 members. 3 There are representatives of the government. 3 members represent the RBI, including Governor Shaktikanta Das.
Repo rate is the rate at which RBI lends to banks. Banks give loans to customers from this loan. A lower repo rate means that many types of loans from the bank will become cheaper. Whereas reverse repo rate is just opposite to repo rate. Reverse rate is the rate at which interest is received from RBI on deposits made by banks. Liquidity is controlled in the markets through the reverse repo rate. That is, if the repo rate is stable, it means that the loan rates from banks will also remain stable.
Anuj Puri, chairman of property consultant firm Anarock, says that not changing interest rates is a positive step for home loan borrowers. This is especially beneficial for those buyers who have taken a loan against the external benchmark repo rate. Retail loan rates are currently at a two-decade low.
