which of the following are the functions of the Monetary Policy Committee Under the Monetary Po...........

Current General Knowledge (CLAT) Others

The Reserve Bank of (RBI) will be conducting one special long term repo operation (SLTRO) for small finance banks (SFB) for each month, totalling Rs 10,000 crore.

The first auction of Rs 10,000 crore will take place on May 17, and the unutilised portion will be auctioned on June 15. Like this, the SLTROs will continue till October 14, or till the unutilised amount is fully utilised.

The SLTRO will be valid for three years. All SFBs will be eligible to participate in the scheme, which was announced by RBI Governor Shaktikanta Das on May 5 to mitigate Covid related dislocations.

However, the SFBs will have to ensure that the amount borrowed from the RBI should at all times be let to the specified segments, namely small business units and other unorganised sectors impacted by the pandemic.

The fresh lending can be done for loans of up to Rs 10 lakh. There will be no tenor restriction regarding lending by SFBs under the scheme.

“Furthermore, SFBs should endeavour to lend within a reasonable period, i.e., not later than 30 days from the date of availing the funds from RBI,” the central bank said in a statement.

which of the following are the functions of the Monetary Policy Committee?

Under the Monetary Policy Framework Agreement, the RBI will be responsible for containing inflation targets at 4% (with a standard deviation of 2%) in the medium term.
RBI is mandated to publish a Monetary Policy Report every six months, explaining the sources of inflation and the forecasts of inflation for the coming period of six to eighteen months.
MPC decides the changes to be made to the policy rate (repo rate) so as to contain the inflation within the target level specified to it by the Central Government

Choose the correct answer by using the codes given below

Only 1 and 2

Only 2 and 3

Only 1 and 3

All of these

Explanation:

the central bank already had a monetary framework and was implementing the monetary policy, the newly designed statutory framework would mean that the RBI would have to give an explanation in the form of a report to the Central Government, if it failed to reach the specified inflation targets. It shall, in the report, give reasons for failure, remedial actions as well as estimated time within which the inflation target shall be achieved. (The factors that constitute failure shall be such as may be notified by the Central Government in the Official Gazette.) Further, RBI is mandated to publish a Monetary Policy Report every six months, explaining the sources of inflation and the forecasts of inflation for the coming period of six to eighteen months. Given this backdrop, MPC decides the changes to be made to the policy rate (repo rate) so as to contain the inflation within the target level specified to it by the Central Government.