RBI Monetary Policy Highlights
- August 5, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
No Comments
RBI Monetary Policy Highlights
Subject: Economy
Section: Monetary policy
Context:
The central bank raised the repo rate to above pre-pandemic level and the Monetary Policy Committee is focused on withdrawal of accommodation.
Highlights:
- The RBI Governor said that India has witnessed–financial stability, macroeconomic stability and resilience of growth despite two Black Swan events i.e. the coronavirus pandemic and the Russia-Ukraine war.
- Black Swan event refers to an unpredictable event that has negative consequences.
- The key lending rate–the repo rate, has been raised by 50 basis points (bps).
- A 1% change equals a change of 100 basis points.
- The repo rate now stands at 5.4 per cent.
- The RBI’s hawkish stance will also stabilize the rupee from depreciating further.
- Inflation projection for the current financial year remains unchanged at 6.7 percent.
- It denotes that the retail inflation would remain above the upper tolerance level of 6 per cent through the first three quarters of 2022-23.
- RBI has expanded the scope of the Internal Ombudsman framework by mandating Credit Information Companies (CICs) to have their own Internal Ombudsman (IO) framework.
Concept:
The Reserve Bank – Integrated Ombudsman Scheme, 2021
- It integrates the existing three Ombudsman schemes of RBI namely:
- the Banking Ombudsman Scheme, 2006;
- the Ombudsman Scheme for Non-Banking Financial Companies, 2018;
- the Ombudsman Scheme for Digital Transactions, 2019.
- It also includes under its ambit Non-Scheduled Primary Co-operative Banks with a deposit size of ₹50 crore and above.
- The Scheme adopts the ‘One Nation One Ombudsman’ approach by making the RBI Ombudsman mechanism jurisdiction neutral.
- It is framed by the Reserve Bank under Section 35A of the Banking Regulation Act, 1949, Section 45L of the Reserve Bank of India Act, 1934 and Section 18 of the Payment and Settlement Systems Act, 2007
- It will provide cost-free redress of customer complaints involving deficiency in services rendered by entities regulated by RBI, if not resolved to the satisfaction of the customers or not replied within a period of 30 days by the regulated entity.
- It will no longer be necessary for a complainant to identify under which scheme he/she should file a complaint with the Ombudsman.
- The Scheme has done away with the jurisdiction of each ombudsman office.
- A Centralised Receipt and Processing Centre has been set up at RBI, Chandigarh for receipt and initial processing of physical and email complaints in any language.
- The Regulated Entity will not have the right to appeal in cases where an Award is issued by the ombudsman against it for not furnishing satisfactory and timely information/documents.
Repo rate and monetary policy stances- already covered |