RBI’s Monetary Policy Committee Meet

December 04, 2020
Current Context: The Reserve Bank of India’s MPC meeting was held. It was headed by RBI Governor, Shaktikanta Das.
RBI’s Monetary Policy Committee Meet
  • RBI has decided to keep interest rates unchanged for the third time in a row and has maintained the policy stance at ‘accommodative’. 
  • As per the decisions from MPC Committee members, the repo rate or the rate at which RBI lends to the banks in unchanged to 4%. 
  • The reverse repo rate under the LAF is also unchanged at 3.35%. 
  • The Marginal Standing Facility (MSF) rate and Bank Rate is also kept unchanged at 4.25%. 
  • These decisions to maintain to status quo on policy rates are taken because of inflation.
  • Also, RBI Governor proposed to place criteria for NBFC dividend distribution by introducing risk-based audit in large NBFCs and Cooperative banks.
  • He also mentioned about the RTGS to be made 24x7 very soon. 
  • As per RBI, the CPI inflation is at 6.8% for Q3 and at 5.8% for Q4. 
  • Also, the Governor stated that GDP growth for the fiscal year 2021 is at -7.5%.
  • The central bank also proposed to increase the limit for contactless card payments from Rs 2000 to Rs 5000 from January 2021.
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das

Question: 

Q.1 What is the current reverse repo rate under the LAF decided in recent Reserve Bank of India’s MPC meeting?
a. 4.35%
b. 3.35%
c. 4.55%
d. 3.55%

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