Highlights of RBI's First Bi-Monthly Monetary Policy Statement FY15

MUMBAI - Following are the highlights of the Reserve Bank of India's
First Bi-Monthly Monetary Policy Statement for 2014-15 (Apr-Mar) that
was detailed today:

* Repo rate unchanged at 8.00%
* CRR kept unchanged at 4.00%
* To up liquidity under term repo to 0.75% of NDTL
* LAF borrowing cut to 0.25% of each bank's NDTL
* Reverse repo rate unchanged at 7.00%
* MSF, Bank Rate remains unchanged at 9.00%
* Going ahead vegetable prices softening is unlikely
* Vegetable prices softening unlikely due to seasonal factor
* To have downward pull on CPI due to base effects
* Policy stance to focus on keeping econ on disinflationary path
* Policy stance to focus on disinflationary glide path
* Global activity has moderated since January policy
* Don't see near-term hike if inflation continues on glide path
* Global growth may strengthen in 2014 with risks on downside
* Term repo liquidity increase aimed at improving transmission
* Real GDP growth continued to be modest in Oct-Dec
* Term repo evolved as useful indicator of liquidity conditions
* Industrial activity continues to be drag on economy
* To propose measures to reduce year-end window dressing by bks
* Going ahead, boost from farm output growth in 2013 will wane
* Overhaul of regulatory framework for NBFCs is underway
* Outlook for 2014 south-west monsoon appears uncertain
* Need to revitalise productivity, competitiveness
* Excluding food and fuel, CPI inflation sticky at 8%
* CAD expected to be around 2% of GDP in FY14
* Export growth has slowed recently
* Need to see if slower exports continue going ahead
* To monitor liquidity to ensure credit flow to key sectors
* Jalan panel on new bks has submitted recommendations
* Will issue new bank licences after nod from poll panel
* To also start work on framework for on-tap bank licences soon
* To start work on framework for differentiated bk licence soon
* Open to bk mergers if competition, stability not compromised
* To issue norms for domestic systemically key banks by end-May
* To issue norms for liquidity coverage ratio by end-May
* To seek greater priority sector loan details from bks from Jun
* May consider limited re-repo of repoed gilts subject to risk

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