Highlights of Second Quarter Review of Monetary Policy (27th October, 2009)
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Highlights of Second Quarter Review of Monetary Policy (27th October, 2009) ......our answer to all your banking needs |
Highlights of Second Quarter Review of Monetary Policy (27th October, 2009)
RBI now restores the SLR for scheduled commercial banks to 25 per cent of their NDTL with effect from the fortnight beginning November 7, 2009.
The cash reserve ratio (CRR) of scheduled banks has been left unchanged at 5% of their net demand and time liabilities (NDTL).
· RBI keeps FY10 GDP forecast at 6% with upside bias; sees modest decline in agriculture.
· Baseline projection for WPI inflation at end-March 2010 is placed at 6.5% with an upside bias. This is higher than the 5% projected in July.
· RBI says that the Indian economy has begun to stabilise despite falling exports and poor monsoon.
· RBI says that the services sector growth is still below trend; Industrial performance has improved markedly.
· RBI says a promising rabi crop prospects will reduce food price pressures.
· RBI says that bank credit growth remains sluggish; urges banks to step up credit expansion efforts.
· RBI lowers FY10 adjusted non-food credit growth projection to 18% from 20%.
· RBI lowers 09/10 money supply growth projection to 17% from 18%.
· RBI says collateralised borrowing and lending obligation (CBLO) to come under CRR from Nov 21.
· RBI says no increase in hold to maturity (HTM) cap for banks as the limit is already higher than SLR.
· RBI says to raise statutory liquidity ratio (SLR) back to 25% from Nov. 7.
· RBI says there is a critical need to lower Govt borrowing to help sustain moderate rate regime.
· RBI says transmission of lower policy rates to the credit market has materialised with a lag.
· RBI says evidence of excess liquidity feeding into asset prices with potential financial stability concerns.
· RBI says the first phase of exit from easy policy begins with ending of some special liquidity steps.
