• The Monetary Policy Committee (MPC) of the Reserve Bank of India on Wednesday raised the benchmark lending rate by 25 basis points (bps) to 6.5% as the RBI targets persistently high core or underlying inflation that it sees as a risk to the improving outlook for the economy.
  • Observing that the rate increases since May were still working their way through the system.
  • The MPC was of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the persistence of core inflation and thereby strengthen the medium-term growth prospects.
  • The MPC, which lowered its CPI inflation forecast for the current fiscal year to 6.5% from the 6.7% it projected at its last policy meeting in December and raised its growth estimate for Q1 of the fiscal year beginning in April by 70 bps to 7.8%, also reiterated that it would stay focused on withdrawal of accommodation.
  • Two of the panel’s six members, however, voted against the majority decision to raise rates.
  • Answering reporters’ questions on the Adani group, Mr. Das said the Indian banking sector was strong and that one case would not impact it.
  • At this point of time, I would like to say that the Indian banking system, including the NBFC sector, continues to be resilient and strong.
  • Based on our assessment, the large exposure guidelines of the RBI have been fully complied with by all the banks.
  • The strength, the size and the resilience of the Indian banking system is now much larger and much stronger to be affected by an individual incident or a case,” the RBI Governor emphasised.
  • When banks lend money to a company, they do not lend on the basis of the market capitalisation of that particular company.
  • They lend on the basis of strength of that company and fundamentals,” he added, without naming a company or group.
  • The Indian economy remains resilient… it has withstood successive global shocks over the last three years.
  • Noting that inflation had shown signs of moderation
  • The RBI chief said the real policy rate had moved into positive territory and the banking system had exited from the chakravyuh of excess liquidity without causing any disruption.


About ChinmayaIAS Academy - Current Affairs

Check Also

purchasing manager's index

Purchasing Managers’ Index: The Economic Health Indicator

TABLE OF CONTENTS News Concept Calculation Components of PMI PMI Releases News: Business activity in …

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Free Updates to Crack the Exam!
Subscribe to our Newsletter for free daily updates