RBI reduces repo rate by 35 bps to 5.40%
- The Reserve Bank of India in its Third Bi-monthly Monetary Policy Meeting, 2019-20 has reduced the Repo rate by 35 bps to 5.40%. The various rates are:
- Policy Repo Rate : 5.40%
- Reverse Repo Rate : 5.15%
- Marginal Standing Facility Rate : 5.65%
- Bank Rate : 5.65%
- CRR : 4%
- SLR : 18.75%
- RBI has decreased the projection of real GDP growth to 6.9 per cent for 2019-20. The stance was accommodative.
Annoucements made in Third Bi-monthly Monetary Policy Meeting, 2019-20 of RBI
- National Electronic Funds Transfer (NEFT) m will be made available on a 24×7 basis from December 2019.
- All categories of billers (except prepaid recharges) who provide for recurring bill payments will be permitted to participate in the Bharat Bill Payment System (BBPS).
- It has been decided to enable diversification of risk and encourage innovation and competition by offering ‘on tap’ authorisation to entities desirous to function/operate/provide platforms for (i) Bharat Bill Payment Operating Unit (BBPOU); (ii) Trade Receivables Discounting System (TReDS); and (iii) White Label ATMs (WLAs).
- the Reserve Bank will also facilitate the creation of a Central Payment Fraud Registry for tracking payment system frauds. Participants in payment systems will be provided access to this registry for near-real time fraud monitoring. The aggregated fraud data will be published to disseminate information on emerging risks.
- In the area of banking regulation, it has been decided to reduce the risk weight for consumer credit including personal loans, but excluding credit card receivables, to 100 per cent from 125 per cent or higher.
Two measures to enhance credit flow to the non-banking financial companies (NBFC) sector
- It has been decided to raise a bank’s exposure to a single NBFC to 20 per cent of Tier-I capital of the bank
- In order to augment the flow of credit to priority sectors that contribute significantly to exports and employment, it has been decided to allow bank lending to registered NBFCs (other than MFIs) for on-lending to (i) agriculture (investment credit) up to ₹ 10 lakhs; (ii) Micro and Small Enterprises up to ₹ 20 lakhs; and (iii) housing up to ₹ 20 lakhs per borrower (up from ₹ 10 lakhs at present), to be classified as priority sector lending.