3rd Bi-monthly Monetary Policy Review (2016-17)

Dear Aspirants

Today RBI announced its 3rd Bi- monthly Policy Rates for the year 2016-17 in Mumbai. Below are the details of the Monetary Statement.

Below are the basic definitions of the Policy Rates.

Repo Rate – It is the rate at which RBI lends money to commercial banks.

Reverse Repo rate – It is the rate at which RBI borrows money from commercial banks.

Cash Reserve Ratio (CRR) – The share of net demand and time liabilities (deposits) thatbanks must maintain as cash balance with the Reserve Bank.

Statutory Liquidity Ratio (SLR) – The share of net demand and time liabilities (deposits) thatbanks must maintain in safe and liquid assets, such as, government securities, cash and gold.

Bank Rate – It is the rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other commercial papers for long term.

Marginal Standing Facility Rate (MSF) – The rate at which the scheduled banks can borrow funds from the RBI overnight, against the approved government securities is termed as MSF.

Current Rates as announced today are:

1. Repo Rate – 6.50% (Unchanged)

2. Reverse Repo Rate – 6.00%

3. CRR (Cash Reserve ratio) – 4% (Unchanged)

4. Bank Rate – 7.00% 

5. MSF (Marginal Standing Facility) – 7.00% 

6. SLR (Statutory Liquidity Ratio) – 21.00% (as per RBI official website)

Important Note

4th Bi-monthly review will be on – Oct 4, 2016

5th Bi-monthly review will be on – Dec 6, 2016

6th Bi-monthly review will be on – Feb 7, 2017

Thanks

Team GradeUp

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