M A I N   N E W S

RBI keeps key rates unchanged
Sanjeev Sharma
Tribune News Service

At this juncture, it is appropriate to leave the policy rate unchanged, and to allow the disinflationary effects of rate increases undertaken during September 2013-January 2014 to mitigate inflationary pressures in the economy Raghuram Rajan, rbi guv

New Delhi, June 3
As expected, the Reserve Bank of India (RBI) kept interest rates unchanged in continuation to its stance on controlling inflation but also sent out a pro-growth signal by allowing more liquidity to banks which will help them to finance more projects and loans.

The repo rate, at which the Reserve Bank of India lends to banks, has been retained at 8 per cent, while the statutory liquidity ratio (SLR) for banks has been cut by 0.5 per cent to 22.5 per cent with effect from June 14.This will release around Rs 39,000 crore of funds by reducing the amount of deposits banks are required to park in government securities and allow them to lend more.

For consumers, there was good news from the RBI as outward remittances have been liberalised. The eligibility limit for foreign exchange remittances under the Liberalised Remittance Scheme (LRS) had been reduced to $ 75,000 last year. In view of the recent stability in the foreign exchange market, RBI has decided to enhance the eligible limit to $ 125,000 without end use restrictions except for prohibited foreign exchange transactions such as margin trading, lottery and the like.

Travellers will also be able to take Indian currency out of the country in larger denomination. Currently, only Indian residents are allowed to take Indian currency notes up to Rs 10,000 out of the country. “With a view to facilitating travel requirements of non-residents visiting India, it has been decided to allow all residents and non-residents except citizens of Pakistan and Bangladesh to take out Indian currency notes up to Rs 25,000 while leaving the country”, RBI announced.