Sixth RBI Bi monthly Policy Review - February 2015

Key Rates - How they stand today

• The policy Repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75 per cent.
• The cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL).
• Reduce the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.0 per cent to 21.5 per cent of their NDTL with effect from the fortnight beginning February 7, 2015;
• Replace the export credit refinance (ECR) facility with the provision of system level liquidity with effect from February 7, 2015;
• Continue to provide liquidity under overnight repos of 0.25 per cent of bank-wise NDTL at the LAF Repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and
• Consequently, the reverse repo rate under the LAF will remain unchanged at 6.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.75 per cent.

Key Points in the Review - 

• 72 applications for Small Finance Banks and 41 applications for Payments Banks received.
• FIIs can invest in India corp bond with 3-year maturity.
• RBI raises cap on forex under LRS to $250,000 per person.
• Inflation likely to be around target level of 6% by January 2016.
• Baseline projection for 2014 GDP growth retained at 5.5%.
• Real GDP growth in 2015-16 expected to rise to 6.5%.