The Monetary Policy Committee (MPC) met on 8th, 9th and 10th February 2022 and based on an assessment of the current macroeconomic situation and the outlook, it voted unanimously to keep the policy repo rate unchanged at 4 per cent. The marginal standing facility (MSF) rate and the Bank Rate remain unchanged at 4.25 per cent. The reverse repo rate also remains unchanged at 3.35 per cent.
The MPC decided by a majority of 5 to 1 to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. Besides, staying pat on interest rates, the central bank MPC announced certain additional measures.
The central bank announced the enhancement of cap under e-RUPI prepaid digital vouchers. RBI proposed to increase the cap of e-RUPI vouchers issued by the Central government and State governments from Rs 10,000 to Rs 1,00,000 per voucher and permit such e-RUPI vouchers to be used more than once (until the amount of the voucher is completely redeemed). This will further facilitate the delivery of various government schemes to the beneficiaries more efficiently.
Along with this, the RBI has also extended the on-tap liquidity window for Emergency Health Services and Contact-intensive Sectors till June 30. The facilities were announced in May and June 2021 during the second wave of the Covid-19 pandemic. Banks were given certain incentives for lending under the two schemes. On account of the continued uncertainties brought on by the third wave, the two schemes have now been extended from March 31, 2022 to June 30, 2022.
The bank has also raised the Voluntary Retention Route (VRR) cap by Rs 1 lakh crore to Rs 2.5 lakh crore with effect from April 1, 2022. The scheme was introduced in March 2019 to facilitate long-term investment by Foreign Portfolio Investors in debt securities issued by the government and the corporates.
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