The Monetary Policy Committee (MPC) resolution has come on expected lines with the policy repo rate unchanged at 4%. The reverse repo and Marginal Standing Facility (MSF) rates remain unchanged at 3.35% and 4.25%, respectively. Besides the decision on rates, all MPC members voted to continue with the accommodative stance as long as necessary to lessen the severity of the COVID-19 pandemic.
Extended Support for the Stressed Sectors
The RBI has extended the On-tap TLTRO scheme for six more months. It will now be valid till September 30, 2021. Liquidity availed by banks under this scheme can be deployed in corporate bonds, commercial papers, and non-convertible debentures of entities in 26 specific stressed sectors. This liquidity can also be used to extend bank loans and advances to these sectors as identified by the KV Kamath Committee.
Bank lending to agriculture, MSME, and housing sectors via NBFCs has been extended by another six months i.e., until September 30, 2021. This facility was earlier made available from August 13, 2019 to March 31, 2021.