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Prime Minister Narendra Modi, on Wednesday, congratulated Reserve Bank of India's (RBI) Governor, Shaktikanta Das for bagging an A+ grade rating in the Global Finance Central Banker Report Cards 2024. Prime Minister in a post on social media "X" said, "Congratulations to RBI Governor Shri @DasShaktikanta for this feat, and that too for the second time. This is a recognition of his leadership at the RBI and his work towards ensuring <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> and stability." <keyword id="20850250" type="General" weightage="20" keywordseo="RBI-Governor-Das" source="keywords">RBI Governor Das</keyword> has been awarded the A+ grade rating for the second consecutive year. The Central Banker Report Cards, published annually by Global Finance since 1994, grade the central bank governors of nearly 100 key countries, territories, and districts, as well as the European Union, the Eastern Caribbean Central Bank, the Bank of Central African States and the Central Bank of West African States. Grades are based on an "A+" to "F" scale for success in areas such as <keyword id="21364628" type="General" weightage="20" keywordseo="inflation-control" source="keywords">inflation control</keyword>, economic growth goals, currency stability and <keyword id="22859834" type="General" weightage="20" keywordseo="interest-rate-management" source="keywords">interest rate management</keyword>. "A" represents an excellent performance, down through "F" for outright failure. "Central bankers have waged war against <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> over the past few years, wielding their primary weapon: higher interest rates. Now, countries around the world are witnessing the tangible results of these efforts, as inflation has dropped significantly," said Global Finance founder and editorial director Joseph Giarraputo. The RBI has been successful in controlling the larger macroeconomic situations in the country. The apex bank is actively working to push economic growth through its <keyword id="20900764" type="General" weightage="20" keywordseo="monetary-policies" source="keywords">monetary policies</keyword>. The RBI recently kept the the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> unchanged at 6.5 per cent after the deliberations of the Monetary Policy Commitee meeting earlier this month. The move reflects the central bank's cautious approach amid ongoing economic uncertainties. Announcing the monetary policy decisions, Das had said that the decision to keep the repo rate steady comes amidst persistent concerns about inflation, which remains above the RBI's target range. RBI Governor Das said that the inflation will moderate from July onwards as the monsoon has improved and global food prices have shown signs of easing in July. The Q1 <keyword id="19999655" type="General" weightage="20" keywordseo="Consumer-Price-Index" source="keywords">Consumer Price Index</keyword> (CPI) inflation for the current financial year (2024-25) is projected at 4.5 per cent. CPI inflation for the first quarter of the next financial year (Q1 2025-26) is projected at 4.4 per cent, as announced by the RBI Governor. India's retail inflation, after breaching 5 per cent in June, softened drastically in July. In line with the moderation in retail inflation, wholesale inflation in India too witnessed a sharp decline in July. The annual rate of inflation based on all India Wholesale Price Index (WPI) numbers is 2.04 per cent (provisional) for July 2024 (over July 2023).

PM Modi congratulates RBI Governor Das on A+ rating in Global Finance Report

The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) on Friday said it will conduct on-tap targeted long-term repo operations (TLTRO) for an amount of Rs 1 lakh crore to ensure comfortable liquidity conditions in the system. "It has been decided to conduct on-tap TLTRO with tenors of up to three years for a total amount of up to Rs 1,00,000 crore at a floating rate linked to the policy repo rate," <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI Governor</keyword> <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword> said while announcing the decisions taken by the central bank's Monetary Policy Committee (MPC). Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial papers, and non-convertible debentures issued by entities in specific sectors over and above the outstanding level of their investments in such instruments as on September 30, 2020, RBI said. The scheme will be available up to March 31, 2021, with flexibility with regard to enhancement of the amount and period after a review of the response to the scheme. In its bi-monthly monetary policy review, RBI kept the policy rate unchanged at 4 per cent and decided to continue with the accommodative stance. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-beats-accenture-to-become-the-worlds-most-valuable-it-services-company/articleshow/78566487.cms">TCS beats Accenture to become the world’s most valuable IT services company — but this not the first time it has raced ahead</a> <a href="https://www.businessinsider.in/india/news/union-minister-ram-vilas-paswan-dies-at-74/articleshow/78558640.cms">India's consumer affairs minister Ram Vilas Paswan passes way at 74</a> <a href="https://www.businessinsider.in/science/space/news/mars-will-appear-bigger-redder-and-brighter-on-october-13-and-wont-get-this-close-to-earth-again-until-2035/articleshow/78556539.cms">Mars will appear bigger, redder, and brighter on October 13 — and won’t get this close to Earth again until 2035</a>

RBI to conduct on-tap TLTRO worth ₹1 lakh crore

Monetary Policy Committee (MPC) has been instituted by the Central Government of India under Section 45ZB of the RBI Act that was amended in 1934. MPC had its first meeting for two days on October 3 and October 4, 2016. The MPC is entrusted with the responsibility of deciding the different policy rates including MSF, Repo Rate, Reverse Repo Rate, and Liquidity Adjustment Facility. Monetary Policy Committee (MPC) has six members and the main objective of this body is to maintain the price stability and boosting up the growth rate of the country’s economy. What is <keyword id="679958" type="ORGANIZATION" weightage="20" keywordseo="RBI-monetary-policy">RBI Monetary Policy</keyword> ? The term ‘Monetary Policy’ is the Reserve Bank of India’s policy pertaining to the deployment of monetary resources under its control for the purpose of achieving GDP growth and lowering the inflation rate. The Reserve Bank of India Act 1934 empowers the RBI to make the monetary policy. We can say that the monetary policy stands for the control measures adopted by the Central Bank of a nation. What the Monetary Policy intends to achieve? As per the suggestions made by Chakravarty Committee, aspects such as price stability, economic growth, equity, social justice, and encouraging the growth of new financial enterprises are some crucial roles connected to the monetary policy of India. While the Government of India tries to accelerate the GDP growth rate of India, the RBI keeps trying to bring down the rate of inflation within a sustainable limit. In order to achieve its main objectives, the Monetary Policy Committee determines the ideal policy interest rate that will help achieve the inflation target in front of the country. Monetary Policy Department (MPD) is an important organ of the Reserve Bank of India that assists the Monetary Policy Committee (MPC) in creating the monetary policy. Monetary Policy Committee Structure Monetary Policy Committee has 6 members as follows: <table style="border-width: initial; border-style: none;"> <tbody><tr> <td style="width: 40.25pt; border-width: 1pt; border-style: solid; border-color: windowtext; padding: 0cm 5.4pt;"> SI. No. </td> <td style="width: 94.5pt; border-top: 1pt solid windowtext; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left-width: initial; border-left-style: none; padding: 0cm 5.4pt;"> Designation </td> <td style="width: 175.5pt; border-top: 1pt solid windowtext; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left-width: initial; border-left-style: none; padding: 0cm 5.4pt;"> The office held </td> <td style="width: 157.25pt; border-top: 1pt solid windowtext; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left-width: initial; border-left-style: none; padding: 0cm 5.4pt;"> Who holds the office as on October 2019 </td> </tr> <tr> <td style="width: 40.25pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> </td> <td style="width: 94.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Chair Person </td> <td style="width: 175.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Governor of the Reserve Bank of India </td> <td style="width: 157.25pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Shri Shaktikanta Das </td> </tr> <tr> <td style="width: 40.25pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> </td> <td style="width: 94.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Member, ex officio </td> <td style="width: 175.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy </td> <td style="width: 157.25pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> BP Kanungo </td> </tr> <tr> <td style="width: 40.25pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> </td> <td style="width: 94.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Member, ex officio </td> <td style="width: 175.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> An officer of the Reserve Bank of India nominated by the Central Board </td> <td style="width: 157.25pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Dr. Michael Debabrata Patra </td> </tr> <tr> <td style="width: 40.25pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> </td> <td style="width: 94.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Member </td> <td style="width: 175.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Professor, Indian Institute of Management, Ahmedabad </td> <td style="width: 157.25pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Dr. Ravindra H. Dholakia </td> </tr> <tr> <td style="width: 40.25pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> </td> <td style="width: 94.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Member </td> <td style="width: 175.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Director, Delhi School of Economics </td> <td style="width: 157.25pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Professor Pami Dua </td> </tr> <tr> <td style="width: 40.25pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> </td> <td style="width: 94.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Member </td> <td style="width: 175.5pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Professor, Indian Statistical Institute (ISI) </td> <td style="width: 157.25pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> Shri Chetan Ghate </td> </tr> </tbody></table> The ex- Officio members of the committee hold the office for a term of four years or until the next order, whichever happens earlier. Monetary Policy Instruments and how they are managed Monetary policy instruments are of two types namely qualitative instruments and quantitative instruments. The list of quantitative instruments include Open Market Operations, Bank Rate, Repo Rate, Reverse Repo Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Marginal standing facility and Liquidity Adjustment Facility (LAF). Qualitative Instruments refer to direct action, change in the margin money and moral suasion. The instruments listed above are managed and regulated as per the needs of the country’s economy. These instruments are effectively used in order to ensure the money supply in the economy so that the inflation rate is stabilized to realize economic growth.

Monetary Policy Committee (MPC) Of India: Its Purpose, Structure and Responsibilities

The Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) and the <keyword id="6357126" type="ORGANIZATION" weightage="20" keywordseo="monetary-policy">Monetary Policy</keyword> Committee (MPC) kept the <keyword id="43352" type="UNKNOWN" weightage="20" keywordseo="Repo-rate">repo rate</keyword> unchanged at 6.25%. 
 
The fifth bi-monthly monetary policy kept the reverse repo rate unchanged at 5.75%. 
 The MPC maintained an accommodative stance with an objective of achieving the CPI <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword> at 5% for Q4 2016-17. 
 
The incremental CRR will be withdrawn from December 10. 
 Addressing a news conference, RBI Governor <keyword id="6375119" type="UNKNOWN" weightage="20" keywordseo="Urjit-Patel">Urjit Patel</keyword> said, “The MPC felt it is important to achieve 5% CPI inflation by March. The 7th Pay Commission disbursements may affect inflation in next financial year. Also, the incremental CRR was purely a temporary measure.” 
 
He said the Fed had nothing to do with the status quo and given an October rate cut, a further cut was not warranted. 
 
Here are 5 other reasons why the RBI kept the repo rate unchanged 
 
1. Retail inflation: Retail inflation measured by CPI eased more than expected for the third consecutive month in October, driven down by a sharper than anticipated deflation in the prices of vegetables. In the fuel category, inflation eased with the decline in LPG prices on an annual basis and a fall in electricity prices from a month ago. Inflation excluding food and fuel continues to show strong persistence. 
 
2. Liquidity: Liquidity conditions underwent major changes in Q3. Surplus conditions in October and early November were overwhelmed by the impact of the withdrawal of SBNs from November 9. Currency in circulation plunged by Rs 7.4 trillion up to December 2; consequently, net of replacements, deposits surged into the 3 banking system, leading to a massive increase in its excess reserves. “Liquidity management was bolstered by an increase in the limit on securities under the market stabilisation scheme (MSS) from Rs 0.2 trillion to Rs 6 trillion on November 29,” the RBI stated. 
 
3. GVA outlook: The outlook for GVA growth for 2016-17 turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of SBNs which are still playing out. 
 
4. 7th Pay Panel: In the services sector, the outlook is mixed with construction, trade, transport, hotels and communication impacted by temporary SBN effects, while public administration, defence and other services would continue to be buoyed by the 7th Central Pay Commission, one rank one pension (OROP). 
 
5. Demonetisation: In India, while supply disruptions in the backwash of currency replacement may drag down growth this year, it is important to analyse more information and experience before judging their full effects and their persistence – short-term developments that influence the outlook disproportionately warrant caution with respect to setting the monetary policy stance.

5 reasons why RBI kept the repo rate unchanged at 6.25%

RBI Governor Urjit Patel-led <keyword id="6357126" type="ORGANIZATION" weightage="20" keywordseo="monetary-policy">Monetary Policy</keyword> Commitee (MPC) cut repo rates by 25 bps to 6.25% and did not change the Cash Reserve Ratio (CRR) at 4%. 
 
In his maiden monetary policy review as a Governor, Patel has adopted an accommodative stance and is in resonance with the objective of achieving consumer price index (CPI) inflation at 5% in 2016-17. 
 
Patel wants to propel growth and there is a medium-term target of 4% within a band of +/- 2 per cent. 
 
The reverse repo rate under the LAF is at 5.75% and the marginal standing facility (MSF) rate and the Bank Rate to 6.75%. 
 
Retail inflation elevated by a sharp pick-up in the momentum of food inflation overwhelming favourable base effects during April-July. 
 
Inflation excluding food and fuel (including petrol and diesel embedded in transportation) has been sticky around 5%. 
 
Reserve Bank’s inflation expectations survey of households. Input costs in the manufacturing sector, including staff costs, have firmed up slightly as evident in various surveys, but the presence of considerable slack has restrained their transmission into corporate pricing power. 
 
The MPC also included the 7th pay commission panel.

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PM Modi congratulates RBI Governor Das on A+ rating in Global Finance Report

ANI

RBI to conduct on-tap TLTRO worth ₹1 lakh crore

PTI

Monetary Policy Committee (MPC) Of India: Its Purpose, Structure and Responsibilities

BI India Bureau

5 reasons why RBI kept the repo rate unchanged at 6.25%

Akanksha Jain

RBI Governor Urjit Patel cuts repo rate by 25 bps to 6.25%

BI India Bureau

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