Banks Get Access To Cheap RBI Funding

Apex bank keeps status quo on key rates, sticks to dovish stance

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The RBI on Thursday maintained a status quo on key rates but opened a Rs 1 lakh crore cheap funds window for banks to step up lending to businesses and consumers in order to spur economic growth.

All six members of the monetary policy committee (MPC) voted to keep the repo rate unchanged at 5.15 per cent and retain an “accommodative policy” stance even as inflation has been on the rise.

For the first time ever, RBI announced long-term repurchase agreements (repos) of one-year and three-year tenors, totaling Rs 1 lakh crore at the policy repo rate of 5.15 percent, from the fortnight beginning on February 15. RBI Governor Shaktikanta Das said the move was aimed at helping banks lower their lending rates, thus quickening monetary policy transmission.