RBI restores SLR, CRR & MSF in a phased manner, Repo and Reverse repo rate unchanged.

Highlights of Monetary policy announcement 2021:

• CRR remains at 3 percent till March 26. The cash reserve ratio (CRR) will be restored in two phases to 3.5 per cent from March 27,2021and 4 per cent from May 22, 2021.
• TLTRO scheme will now available to NBFCs
• Repo rate at 4%, Reverse rate at 3.35% remain unchanged. MSF and Bank Rate remain unchanged at 4.25%.
• The RBI will extend MSF relaxation for the next six months i.e. up to September 30, 2021.
• Banks were allowed to avail of funds under the marginal standing facility (MSF) by dipping into the Statutory Liquidity Ratio (SLR) up to an additional one per cent of net demand and time liabilities (NDTL), i.e., cumulatively up to 3 per cent of NDTL. This facility, which was extended in phases up to March 31, 2021, will now be available for a further period of another six months, i.e. up to September 30, 2021. This dispensation provides increased access to funds to the extent of ₹1.53 lakh crore.
• In respect of SLR Holdings in Held to Maturity (HTM) category, the limits would be restored from 22 per cent  of NDTL to 19.5 per cent acquired on or after September 1, 2020, up to March 31, 2021, in a phased manner starting from the quarter ending June 30, 2023. It is expected that banks will be able to plan their investments in SLR securities in an optimal manner with a clear glide path for the restoration of HTM limits.
• In order to incentivize new credit flow to the micro, small, and medium enterprise (MSME) borrowers, Scheduled Commercial Banks will be allowed to deduct credit disbursed to ‘New MSME borrowers’ from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR). For the purpose of this exemption, ’New MSME borrowers’ shall be defined as those MSME borrowers who have not availed any credit facilities from the banking system as of January 1, 2021. This exemption will be available only for exposures up to ₹25 lakh per borrower for credit extended up to the fortnight ending October 1, 2021 for a period of one year from the date of origination of the loan or the tenure of the loan, whichever is earlier.

• The retail investors can now open gilt accounts with the RBI. Das also said that the retail investors can now access the primary and secondary government bond market. He also said that the resident individuals will be able to make remittances to IFSCs for the NRIs.
• An integrated ombudsman scheme for customer grievance redressal, which will be rolled out by June 2021.
• The limit for Contactless Card increased from ₹ 2,000 to ₹ 5,000 per transaction.
• RTGS system to be made 24X7 in the next few days.
• Real GDP growth for 2021 projected at -7.5%.
• Criteria for NBFC dividend distribution, risk-based audit in large NBFCs & co-op banks to be introduced.
• Retail inflation likely to remain elevated and pegged at 6.8 per cent for the 3rd quarter of the current fiscal year.
• CPI projection is revised to 5.2 per cent for Q4 FY21 and CPI inflation is pegged at 5-5.2 per cent in H1 FY22.

The existing key policy rates are as under;