RBI Monetary Policy: RBI raises repo rate by 50 bps to 4.90%

The six-member Monetary Policy Committee (MPC) led by RBI Governor Shaktikanta Das voted unanimously to raise repo rate by 50 basis points to 4.90 percent. The Monetary Policy Committee has raised the repo rate in order to tackle elevated inflation. Standing Deposit Facility and Marginal Standing Facility rates also raised by 50 basis points. Standing Deposit Facility rate now 4.65 percent, and Marginal Standing Facility rate now 5.15 percent.

RBI Monetary Policy

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Consequently, the various rates are as under:

• Policy Repo Rate: 4.90%
• Standing Deposit Facility (SDF): 4.65%
• Marginal Standing Facility Rate: 5.15%
• Bank Rate: 5.15%
• Fixed Reverse Repo Rate: 3.35%
• CRR: 4.50%
• SLR: 18.00%

All members of the Monetary Policy Committee:

• Dr. Shashanka Bhide,
• Dr. Ashima Goyal,
• Prof. Jayanth R. Varma,
• Dr. Rajiv Ranjan,
• Dr. Michael Debabrata Patra and
• Shri Shaktikanta Das

Key points:

• E-mandate on cards for recurring payments, limit upped from Rs 5,000 to Rs 15,000.
• RBI allows linking of credit cards to UPI platform.
• Limits on individual home loans given by urban and rural co-operative banks are being revised upwards more than 100 percent taking into account the rise in housing prices over the last decade.
• Rural co-operative banks can now extend finance to commercial real estate, or loans for residential housing projects, within the limit of 5% of their total assets.
• Urban cooperative banks will now begin doorstep banking services to customers.
• India’s exports have performed exceptionally well. As on June 3, 2022, India’s forex reserves stood at $601.1 bn.

RBI revises inflation projection:

• RBI revises inflation projection for FY23 to 6.7 % from 5.7% earlier
• For April-June 2022 revised to 7.5% from 6.3%
• For July-September 2022 revised to 7.4% from 5.8%
• For October-December 2022 revised to 6.2% from 5.4%
• For January-March 2023 revised to 5.8% from 5.1%

Real GDP forecast:

• Real GDP forecast for FY23 retained at 7.2%
• Q1 (April-June) 2022 GDP growth forecast at 16.2%
• Q2 (July-September) 2022 GDP growth forecast at 6.2%
• Q3 (October-December) 2022 GDP growth forecast at 4.1%
• Q4 (January-March ’23) GDP growth forecast at 4.0%

Important Takeaways For All Competitive Exams:

• Reserve Bank of India (RBI) Chairman: Shri Shaktikanta Das

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