Statement on Developmental and Regulatory Policies by RBI in August 2020
The Reserve Bank of India has released the Monetary Policy Statement, 2020-21 after its MPC meet between August 4 to 6, 2020. After this, the RBI has released the Statement on Developmental and Regulatory Policies. The major points that are important from exam point of view is mentioned below:
Additional standing liquidity facility (ASLF)- National Housing Bank (NHB) and National Bank for Agriculture and Rural Development (NABARD) will be provided with an additional standing liquidity facility (ASLF) of Rs 5,000 crore each.
Advances against Gold Ornaments and Jewellery– Presently, loans sanctioned by banks against pledge of gold ornaments and jewellery for non-agricultural purposes should not exceed 75 per cent of the value of gold ornaments and jewellery. In view of COVID-19, RBI has increased the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent. This relaxation shall be available till March 31, 2021.
Positive Pay Mechanism for Cheques– The RBI shall soon launched a mechanism named Positive Pay for all cheques of value ₹50,000 and above to further augment customer safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves. Under this mechanism, cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque.
Points to remember:
- Amount of additional standing liquidity facility (ASLF) to NABARD or NHB by RBI?- Rs 5000 crore
- What is the new permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes?- 90%
- Name of mechanism to be launched by RBI to tackle cheque frauds?- Positive Pay
- Positive Pay will serve to?- stop cheque fraud
Source: RBI