The year 2021 is coming to a close. Throughout the year, the Reserve Bank of India (RBI) undertook several decisions in public interest. We bring a list of some of the most important decisions taken during this year. 

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Key interest rates unchanged

The Reserve Bank had kept the key interest rate unchanged after its Monetary Policy Committee (MPC) meeting in December. It kept benchmark lending rate unchanged 9th time in a row at 4 per cent. The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. Consequently, the reverse repo rate continues to earn 3.35 per cent for banks for their deposits kept with RBI.

Digital Payment solutions in offline mode

At the end of the MPC meeting on October 8, 2021, the RBI Governor informed that a scheme to test technologies that enable digital payments even in remote places where internet connectivity is either absent or barely available was announced in August 2020. The statement on Developmental and Regulatory Policies dated August 06, 2020 had announced a scheme to conduct pilot tests of innovative technology that enables retail digital payments even in situations where internet connectivity is low / not available (offline mode). 

It must be noted that three pilots were successfully conducted under the scheme in different parts of the country during the period from September 2020 to June 2021 involving small-value transactions covering a volume of 2.41 lakh for value Rs 1.16 crore. Now, given the encouraging experience gained from the pilot tests, it is proposed to introduce a framework for retail digital payments in offline mode across the country. This will further expand the reach of digital payments and open up new opportunities for individuals and businesses.

Enhancing Transaction Limit in IMPS to Rs 5 lakh

In view of the importance of the IMPS system and for enhanced consumer convenience, it was proposed to increase the per transaction limit from Rs 2 lakh to Rs 5 lakh during the RBI MPC meeting in October.

SLTRO for Small Finance Banks

A special three-year long-term repo operation (SLTRO) of Rs 10,000 crore at the repo rate was introduced for Small Finance Banks (SFBs) in May 2021. This facility was available till October 31, 2021. Recognising the need for continued support to small business units, micro and small industries, and other unorganised sector entities, it has been decided to extend this facility till December 31, 2021 and make it available On Tap, the RBI statement said.

Increase in UPI limit for Retail Direct Scheme and IPO

After the RBI MPC meeting in December, the RBI Governor made an important announcement on 'Increase in UPI Transaction Limit for Specified Categories.' The RBI statement on Developmental and Regulatory Policies said, "To further encourage the use of UPI by retail investors, it is proposed to enhance the transaction limit for payments through UPI for Retail Direct Scheme and IPO applications from Rs 2 lakh to Rs 5 lakh."

Second loan moratorium

Due to the second wave of the COVID-19 pandemic, earlier this year, RBI asked its lenders to allow a second moratorium. The eligible borrowers who did not use the first loan moratorium can avail the second one, it had said. Also, those who used the first one can get the moratorium period extended. This announcement was made by the RBI Governor on May 5, 2021. 

In the last Monetary Policy Committee (MPC) meeting, RBI Governor Shaktikanta Das said that the GDP growth in the second quarter of the current fiscal (2021-22) was slower than the 20.1 per cent expansion in the previous quarter which largely reflected a bounce back from last year's crash. However, it was better than the contraction of 7.4 per cent in July-September 2020. The RBI Governor also informed that RBI retains GDP growth target at 9.5 per cent in FY22.