RBI Monetary Policy 2022 Highlights

RBI Monetary Policy 2022 Highlights

The monetary policy is a policy formulated by the central bank, i.e., RBI (Reserve Bank of India), and relates to the monetary matters of the country. The approach involves measures taken to regulate the stockpile of money, accessibility, and cost of credit in the economy.

Key takeaway points from the recent monetary policy:

Here’s what you need to know.

Things that remain unchanged:
ParticularsRemains at:
Repo Rate14%
The committee also opted to maintain an accommodative stance in order to ensure economic growth and recovery.
Reverse Repo Rate3.35%.
Marginal Standing facility rate4.25%
Bank Rate4.25%.
CRR or cash reserve ratio4%.
SLR or statutory liquidity ratio18%.
 Monetary Policy
  • MPC has been exercised by the government to keep the inflation range between 2-6%.
  • The Reserve Bank pegged the real economic growth rate for 2022-23 at 7.8%, down from 9.2% expected in 2021-22, in view of uncertainties on account of the pandemic and elevated global commodity prices.
  • RBI’s Consumer Price Index (CPI) inflation estimation for Financial Year 2022 has been retained at 5.3%. In December 2021 the CPI was at 5.6% which was near to the upper end of the tolerance band.
  Things that have changed:
  • The RBI has hiked the limit for inflows under the Voluntary Retention Route(VRR) Scheme from Rs 1.5 lakh crore to Rs 2.5 lakh crore. The governor said that this step will help supply additional sources of capital for the domestic debt market, including government securities. (VRR is a channel which helps FPI invest in debt markets in India.)
  • Foreign Portfolio Investment (FPI) will be given more freedom in certain technical regulations of RBI and SEBI but with the condition that FPI must remain invested in India for at least 3 years.
  • The cap on E-Rupi has been increased from Rs 10,000 to Rs 1 Lakh and the vouchers can be used more than once which was not possible before.
  • On-tap Sector Specific windows extended till the next session. The Reserve Bank of India proposed to extend the term-liquidity facility of Rs 50,000 crore offered to emergency health services by three months till june 30, 2022.

Note – The next meeting is scheduled for 6–8th April.

What is e-Rupi?

e-RUPI is a digital solution to allow a cashless payment solution for COVID-19 vaccination. This virtual e-RUPI is convenient and risk-free as it keeps the details of the beneficiaries completely confidential. The entire transaction process through this voucher is relatively faster and at the same time reliable. This is because the voucher stores the required amount.

Recently the RBI governor Shaktikanta Das increased the eRupi limit to Rs 1 Lakh from Rs 10,000 and made it reusable.

How do you buy e-RUPI?

One has to register on e-RUPI using your Mobile Number. Now they can select any service that they want to send or share with someone. One has various choices between  Health Care Schemes, Government Schemes Vouchers and more.

Now they can send it to the beneficiary Mobile Number and the person will get it in the form of SMS or QR Code. It is not necessary for the beneficiary to have a bank account or a digital paying app.

The security of the beneficiary is not compromised either and it is a hassle-free two-step process. The most convenient part for all is that there is no handling of cash or cards and the chances of the payment being unsuccessful is extremely low.

The meetings take place every 3 months and various things are updated on the basis of the needs of the country. Stay tuned for the next update!

  1. “The rate of interest charged by the central bank on the cash borrowed by commercial banks”

 2. “Reverse repo rate is the rate at which the central bank of a country borrows money from commercial banks within the country”

  3. “Marginal Standing Facility enables banks to borrow funds from RBI in emergency situations when their liquidity absolutely dries up”

 4. “Cash reserve ratio (CRR) is the percentage of a bank’s total deposits that it needs to maintain as liquid cash. This is an RBI requirement, and the cash reserve is kept with the RBI.”

 5. “Statutory liquidity ratio (SLR) refers to the minimum reserve requirement that needs to be maintained by commercial banks in the nation”

6.  In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it

 7. Foreign portfolio investment (FPI) involves holding financial assets from a country outside of the investor’s own. FPI holdings can include stocks, ADRs, GDRs, bonds, mutual funds, and exchange traded funds.

Related Posts
Leave a Reply

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