RBI Keeps rates Unchanged

The Reserve Bank of India  left the policy rates unchanged in its bi-monthly policy review. The financial experts in the Valley termed it a positive sign for the banking sector.
RBI Governor Dr Raghuram Rajan kept the key policy rates on hold in his second bi-monthly monetary policy review, the first under the Modi regime.
Consequently repo rate, the rate at which RBI lends money to the banks for the short term, remains at 8 per cent. The reverse repo rate, the rate at which RBI borrows money from banks, remains at 7%.
RBI has also decided to reduce the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 23.0 per cent to 22.5 per cent of their net demand and time liabilities (NDTL) with effect from the fortnight beginning June 14, 2014.The RBI explained the reduction of the statutory liquidity ratio (SLR) as a step that will give banks more freedom to expand credit to the non-government sector in view of the anticipated economic recovery and improved investment demand. At the same time the RBI said that it was cognizant of the significant on-going financing needs of the government. That’s why it reduced SLR by a mere 0.50% with further changes dependent on the likely path of fiscal consolidation.

sources:greatKashmir.com