Key takeaways from the RBI’s monetary policy committee conference

livemint.com:

Subscribe to enjoy similar stories. The Reserve Bank of India's monetary policy committee (MPC) on Friday cut the key policy interest rate by 25 basis points to 6.25% to support growth. At a post-policy press conference, new RBI governor Sanjay Malhotra spoke on a range of issues such as implementation of the proposed guidelines on liquidity coverage ratio (LCR), working with the government on various recommendations, geopolitical developments, and the cost of policy actions on regulated entities.

Mint brings key takeaways from the policy conference and comments made by the RBI governor and deputy governors M. Rajeshwar Rao, T. Rabi Sankar and Swaminathan J.

All comments, unless otherwise identified, are by Malhotra. Edited excerpts: The Bimal Jalan Committee has given 5.5-6.5% ratio of the balance sheet to be maintained as a buffer. We are at 6.5% as of 31 March, 2024.

The overall framework is being reviewed and if the committee feels that there is any change, basis that we will take a decision. DG Rao: The Bimal Jalan Committee recommendations were for the period from 31 March 2019 till 30 June 2024. We are reviewing the whole thing internally and seeing whether any changes are warranted.

Then if we need to engage with the government or the board, we will do it at a later point in time. The entire economic capital framework is being reviewed. It is not only about stability, the implementation of LCR norms comes with a cost.

We will be very conscious of the costs that it brings in so that we make efficient use of our resources. I do not think 31 March, 2025 is giving sufficient time, so certainly they will not be implemented at least before 31 March, 2026. That's the kind of timeline needed at the minimum.