RBI Monetary Policy 2021: Key takeaways from Governor Shaktikanta Das' announcement

Reserve Bank of India Governor Shaktikanta Das on Friday announced the second bi-monthly RBI Monetary Policy 2021 for the ongoing Financial Year 2021-22. For FY 2021-22, the first monetary policy was announced back in April. In the RBI Monetary Policy today, Governor Das has listed out a raft of data and measures.

The Reserve Bank of India (RBI) Monetary Policy has kept the interest rates unchanged. The repo rate has been kept at 4%. The reverse repo rate or the central bank's borrowing has been unchanged at 3.35%. Governor Das also announced additional measures that RBI will undertake to help businesses ailing from COVID-19 impact.

Here are the key highlights of the Reserve Bank of India Governor Shaktikanta Das' speech.

RBI Monetary Policy - Key takeaways

The repo rate has been retained at 4% and the reverse repo rate at 3.35%, RBI Governor Shaktikanta Das announced.

The marginal standing facility (MSF) rate and the bank rate remained unchanged at 4.25%.

RBI expects real GDP growth at 9.5% in 2021-2022 - 18.5% in the first quarter, 7.9% in the second quarter, 7.2% in the third quarter, and 6.6% in the fourth quarter.

Governor Shaktikanta Das said RBI Monetary Policy 2021 has estimated CPI inflation at 5.1% for Financial Year 2021-2022.

RBI has predicted CPI inflation at 5.2% in Quarter 1, 5.4% in Quarter 2, 4.7% in the third quarter, and 5.3% in Quarter 4.

Normal monsoon and business resilience can provide a tailwind to economic recovery. 

RBI Governor said that RBI is actively engaged in the forex market as the strength of the financial system is crucial for fighting against pandemics.

Governor Das announced an on-tap liquidity window for contact intensive sectors. A separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022, with tenors of up to 3 years at the repo rate.

Under the scheme, banks can provide fresh lending support to hotels, restaurants, tourism, travel operators, adventure and heritage facilities, aviation ancillary services, and other services that include private bus operators, car repair services, rent a car services providers, event/conference organisers, spa clinics and beauty parlours and saloons.

RBI Governor Shaktikanta Das said that the Reserve Bank of India has extended a special liquidity facility worth Rs 16,000 crore to SIDBI for on-lending and refinancing.

RBI Governor has disclosed that the Reserve Bank of India will expand the limit of restructuring loans for small businesses and individuals to Rs 50 crore from earlier Rs 25 crore.

Shaktikanta Das said that the National Automated Clearing House (NACH) payment system will function seven days a week from August 2021.