RBI Monetary Policy: The Shaktikanta Das-led RBI Monetary Policy Committee on Thursday unanimously decided to keep the repo rate unchanged at 4 per cent while maintaining the accommodative stance. Das said that reverse repo rate also remains unchanged at 3.35 per cent. 

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“Accommodative stance of Monetary Policy to continue as long as necessary to revive growth and mitigate impact of COVID19, while ensuring inflation remains within target going forward,” Das said, while addressing media, during an online briefing.

He further announced that Marginal Standing Facility Rate and bank rate remains unchanged at 4.25%.

The RBI governor said that domestic food inflation has remain elevated across economies ever since the Coronavirus outbreak and added that agriculture sector prospects have improved with the good monsoons and rise in Kharif sowing area. MPC is expected inflation to stay elevated in Q2FY21 but is of the view that is it likely to ease in H2 aided by favourable base effects, Das said.

He announced that loan to value ratio or LTV for loans sanctioned against pledge of gold ornaments has been increased to 90 per cent. As per the announcement, the relaxation shall be available till March 31, 2021.

As per extant guidelines, loans sanctioned by banks against pledge of gold ornaments and jewellery for non-agricultural purposes should not exceed 75 percent of the value of gold ornaments and jewellery. 

Addressing the media during an online briefing, RBI governor Shaktikanta Das said that it has been decided to increase the permissible loan to value ratio (LTV) for such loans to 90 percent. The decision comes in the wake of COVID1-9 impact on households. 

In March this year, MPC had slashed the repo rate by 75 basis points, bringing it down to 4.4 percent from the earlier 5.15 percent. It had further reduced the repo rate by 40 percent to 4 percent in May, while maintaining its accommodative stance. 

As per the RBI Act 1934, the MPC is required to meet at least four times in a year. For the financial year 2020-21, the committee was scheduled to meet five times-- June 3-5, August 4-6, September 29-30 to October 1, December 2-4 and February 3-5 2021.