RBI maintains status quo on repo rate and cash reserve ratio

On April 1, 2014 Reserve Bank of India Governor Dr. Raghuram G. Rajan in his First Bi-monthly Monetary Policy Statement for 2014-15 has announced the monetary and liquidity measures based on an assessment of the current and evolving macroeconomic situation. RBI has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent; keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL); and increase the liquidity provided under 7-day and 14-day term repos from 0.5 per cent of NDTL of the banking system to 0.75 per cent, and decrease the liquidity provided under overnight repos under the LAF from 0.5 per cent of bank-wise NDTL to 0.25 per cent with immediate effect. Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent.