Highlights of monetary policy on 3rd May 2013

Following are the highlights of RBI’s annual monetary policy 2013-14:

• Key short-term lending rate (repo) cut by 0.25 per cent to 7.25 per cent.

• Cash Reserve Ratio kept unchanged at 4 per cent.

• RBI says assessment of growth-inflation dynamics limits scope for further easing of policy rate.

• FY’14 GDP growth pegged at 5.7 per cent, down from Government estimates.

• Inflation to remain range-bound around 5.5 per cent in FY’14.

• CAD is the biggest risk to the economy.

• RBI proposes doubling of limits on priority sector lending to MSMEs to Rs 5 crore.

• Banks asked to stop differential treatment to home-branch and non-home branch customers.

• RBI says probe into Cobrapost’s sting operation calls for a better regulatory compliance by banks.

• Banks not carrying out customer due diligence as required while marketing and distributing third-party products.

• RBI proposes restricting gold imports only to meet genuine needs of exporters of gold jewellery.

• Banks asked to set up mechanism to monitor and review implementation of Direct Benefit Transfer.

• Mid-quarter review of policy on June 17.