Reserve Bank of India(RBI) Governor Shaktikanta Das on Friday announced that no approval will be required for banks to infuse capital in their branches and overseas arms.
"At present, banks incorporated in India can infuse capital in their overseas branches and subsidiaries; retain profits in these centres; and repatriate/ transfer profits therefrom with prior approval of the RBI. With a view to providing operational flexibility to banks, it has been decided that banks need not seek prior approval of the RBI if they meet the regulatory capital requirements," said Das in his statement.
The Monetary Policy Review Committee on Wednesday voted to keep benchmark signalling rates unchanged while maintaining its ‘accommodative’ stance.
The repo rate stands unchanged at 4 percent, the reverse repo rate at 3.35 percent, the marginal standing facility and the bank rate have been maintained at 4.25 percent.
RBI Governor Shaktikanta Das said the country was better prepared to deal with economic disruption from COVID. He said that in several sectors, the pre-pandemic levels of output had been surpassed, but also said that the economy is not yet strong enough for self-sustaining growth and so would need policy support for some more time. The RBI retained its GDP growth forecast at 9.5 percent for the current fiscal (2021-22).
The RBI has revised its quarterly projections for the next year due to the uncertainty caused due to the Omicron variant of the COVID-19 virus and with an eye on the US Federal Reserve's liquidity tapering expectations.
On the inflation front, the has projected the Consumer Price Index (CPI) inflation at 5.3 percent for the financial year 2022, the same it had projected in the October meeting.
Das said the headline inflation might peak in the fourth quarter of FY22. While in Q3 FY22, the inflation is projected at 5.1 percent, it can peak to 5.7 percent in Q4 FY22. It will cool to 5 percent in the Q1 and Q2 of FY23, he said.
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(Edited by : Ajay Vaishnav)
First Published: IST