Second Bi-monthly Monetary Policy Statement, 2016-17

Hello Sehpaathians,

Reserve Bank of India (RBI) has published its 2nd Bi-monthly Monetary Policy Statement, 2016-17. So, we are presenting you a short notes on Current Rates after Second Bi-monthly Policy 2016-17 which is very important for your upcoming banking exams. The present Current Rates (Policy Rates, Reserve Ratios and Lending/Deposit Rates) are given as below:

Current Rates		Remarks (In respect of previous Bi-monthly Policy)
Policy Rates
Policy Repo Rate	6.50%	Unchanged
Reverse Repo Rate	6.00%	Unchanged
Marginal Standing Facility Rate (MSF)	7.00%	Unchanged
Bank Rate	7.00%
Reserve Ratios
Cash Reserve Ratio (CRR)	4%	Unchanged
Statutory Liquidity Ratio (SLR)	21.25%	Unchanged
Lending / Deposit Rates
Base Rate	9.30% – 9.70%
Savings Deposit Rate	4.00%
Term Deposit Rate > 1 Year	7.00% – 7.50%

The Reserve Bank of India (RBI) kept the repo rate unchanged at a five-year low of 6.5% in its bi-monthly monetary policy review meeting today. The central bank has cut the repo rate by 150 basis points since January 2015, including a 0.25% reduction in April. The RBI further maintained the reverse repo rate at 6%, and the cash reserve ratio at 4%.

Monetary and Liquidity Measures:

On the basis of an assessment of Second Bi-monthly Monetary Policy Statement, 2016-17, Reserve Bank of India has decided to:

keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent;

keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL); and

Continue to provide liquidity as required but progressively lower the average ex ante liquidity deficit in the system from one per cent of NDTL to a position closer to neutrality.
Consequently, the reverse repo rate under the LAF will remain unchanged at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 7.0 per cent.

Note: The third bi-monthly monetary policy statement will be announced on August 9, 2016.