The Monetary Policy Committee (MPC) of the Reserve Bank kept the repo rate unchanged at 4% and maintained an ‘accommodative’ stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.
The MPC voted unanimously to hold rates steady. The RBI MPC began its three-day deliberations on Wednesday and the outcome of the six-member MPC headed by the governor was announced today.
The key lending rate of the RBI or the repo rate was left unchanged at 4% while the reverse repo rate or the key borrowing rate stayed at 3.35%.
The Reserve Bank of India on Friday said retail inflation is likely to remain elevated at 6.8% for the third quarter of the current fiscal. RBI proposes to enhance limits for contactless card payments from Rs 2000 to Rs 5000 from Jan 2021.
“We will place our analysis on likely NPA situation in the financial stability report expected in the last week of December”, says RBI Governor.
Commercial and co-operative banks will retain profits earned & will not give out dividends for FY21, said RBI Governor.
“We need to competitive and not combative. With financial stability and depositor interest in mind we have fixed issues at two scheduled commercial banks,” he added.