RBI announces monetary policy; No changes in Interest rate & Reverse Repo rate

The Reserve Bank of India (RBI) in its bi-monthly Monetary Policy statement issued today, October 9, 2020, has maintained a status quo keeping the key interest rates unchanged. The reverse repo rate remains unchanged at 3.35 per cent, the repo rate at 4 per cent.

This is the second time in a row the apex bank has kept the key rates unchanged.

The Monetary Policy Committee (MPC) has also decided to maintain its accommodative stance as long as necessary at least through the current financial year and next year as Indian economy is entering into a decisive phase in its fight against CORONAVIRUS.

In major announcements today, RBI Governor Shaktikanta Das proposed that the RTGS system for real-time fund transfer become 24X7 from December 2020. He said, the RBI stands ready to undertake further measures as necessary to assure market participants of access to liquidity and easy financial conditions.

The new housing loans risk weights to be linked to Loan-to-value ratio and also rationalize risk weights for all new housing loans until March 31, 2022. Also, the bank will extend the scheme for co-lending to all NBFC, HFC. As for GDP, the growth may break out of contraction and enter a positive zone by the fourth quarter of the current fiscal.