Urjit Patel Current Affairs - 2019

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Shaktikanta Das: 25th Governor of RBI

  1. India’s former economic affairs secretary and current member of the Finance Commission Shaktikanta Das is to be appointed as next RBI Governor. He will be the 25th Governor of the apex bank of the country.

About  Shaktikanta Das

  • Shaktikanta Das is a 1980 batch IAS officer of Tamil Nadu Cadre and a very prominent bureaucrat who served under both NDA and UPA governments.
  • He served as economic affairs secretary from 2015 to 2017; and was key official in both big economic moves of the government viz. demonetisation and implementation of GST.
  • Appointment committee of cabinet approved Shaktikanta Das appointment as RBI governor. He will serve as governor for the term of three years.

Background

After the resignation of Urijit patel, Shaktikanta Das has been appointed as 25th governor of RBI. Urijit Patel resigned due to personal reasons. His tenure as RBI governor was about to complete in September 2019. Patel has become fourth RBI to step down before end of term. Before him, Sir Osborne Smith, Benegal Rama Rau and S Jagannathan had resigned before completion of their respective tenures.

Month: Categories: Business, Economy & Banking

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Repo rate keeps unchanged at 6.5%

Reserve Bank of India (RBI) in its fifth bimonthly monetary policy review for financial year 2018-19 has decided to maintain status quo in policy rates by keeping repo rate unchanged at 6.5%. The reverse repo rate has also been maintained at 6.25%.  This decision was taken by RBI’s six member Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel.

Key Facts

The decision of MPC is consistent with stance of calibrated tightening of monetary policy in consonance with objective of achievingmedium-term target for consumer price index (CPI) inflation of 4% within band of +/- 2 per cent, while supporting growth. It has projected retail inflation projection lowered in the range of 2.7-3.2% for 2nd half of 2018-19; 3.8-4.2% in first half of 2019-20. It has forecasted GDP growth for 2018-19 at 7.4% and 7.5% for first half of 2019-20.

Policy Rates

Repo rate: It was unchanged at 6.5%. It is rate at which RBI lends to its clients generally against government securities.

Reverse Repo Rate: It was unchanged at 6.25%. It is rate at which banks lend funds to RBI.

Marginal Standing Facility (MSF) Rate: It was unchanged at 6.75%. It is rate at which scheduled banks can borrow funds overnight from RBI against government securities. It is very short term borrowing scheme for scheduled banks.

Bank Rate: It was unchanged at 6.75%. It is rate charged by central bank for lending funds to commercial banks. Higher bank rate will translate to higher lending rates by banks. It influences lending rates of commercial banks.

Cash Reserve Ratio (CRR): It was unchanged at 4%. It is amount of funds that banks have to keep with RBI. The RBI uses CRR to drain out excessive money from system.

Statutory Liquidity Ratio (SLR): It cut by 25 basis points to 19.25% from January 1, 2019. It is amount that banks have to maintain a stipulated proportion of their net demand and time liabilities (NDTL) in form of liquid assets like cash, gold and unencumbered securities, treasury bills, dated securities etc. It will be reduced by 25 basis points every quarter until it reaches the 18% level.

Month: Categories: National

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