The Reserve Bank of India said that the dates of the MPC’s meeting will be announced shortly.
The meeting of the Monetary Policy Committee (MPC), which was scheduled for 29 September, 30 September, and 1 October 2020 has been rescheduled. The Reserve Bank of India said that the dates of the MPC’s meeting will be announced shortly. The Reserve Bank is required to conduct at least four meetings of the Monetary Policy Committee in a year. Even as weak demand hurts the economy, the RBI had refrained from cutting the benchmark lending rate, leaving the rate unchanged at 4 percent in the last MPC meet. However, it continued to maintain the accommodative stance in the wake of weak growth numbers and the adverse impact of the coronavirus pandemic on the economy.
RBI Governor Shaktikanta Das had cited the possibility of rising inflation as the main reason behind maintaining the status quo on rates. The headline inflation rate has been above the central bank’s 4 per cent target since the beginning of the year and it is expected to ease only in the second half.
In the wake of the pandemic, the central bank has so far announced various liquidity, monetary, regulatory, and supervisory measures in the form of interest rate cuts, higher structural and durable liquidity, the moratorium on debt servicing, asset classification standstill, and recently a special resolution window under Prudential Framework for Resolution of Stressed Assets. However, the health of Indian banks is also at utmost priority for the RBI.
Shaktikanta Das had underlined that the core of resilient banks is made up of good governance,
effective risk management, and robust internal controls. However, he noted that this doesn’t mean that Indian banks do not have sound governance and risk management systems
in place but there is always scope for improvement. He further asked the banks to look out for ‘sunrise’ sectors, such as those in rural areas, while supporting those which have the potential to bounce back.