RBI Third Bi-Monthly monetary Policy Review

RBI's Third Bi-Monthly monetary policy review 2015 : Highlights

In it's Third Bi-Monthly monetary policy review, the Reserve Bank of India (RBI) kept its interest rates unchanged. Earlier on 2nd June 2015, in it's Second bimonthly monetary policy review, the RBI has lowered its key Repo Rate by 25 basis points to 7.25 percent after lowering it by the same amount in January and March. But this time, the RBI didn't make any changes in Key Rates. The reserve ratio stands at 7.25 percent, the reverse ratio stands at 6.25 percent and cash reserve ratio (CRR) and statutory liquidity ratio (SLR) at 4 percent and 21.5 percent, respectively.

Here are the highlights of RBI's 3rd Monetary Policy review.

Policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per centCash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL)
continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions continue with daily variable rate repos and reverse repos to smooth liquidity.

Economic recovery is still work in progress hardening of inflation, excluding food and fuel, is most worrisome.

Retains growth target at 7.6 per cent for 2015-16. RBI says banks have passed on an average 0.3% interest rate cut as against its 0.75% rate cut since January Govt’s capital infusion in PSBs to help loan growth and transmission of interest rate cuts as well as ease liquidity.

What is Land Acquisition Bill?

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Joint Committee of Parliament on Land Acquisition Bill has agreed to withdraw six key amendments brought out by the NDA government in 2013 Act.

Important Points to Know about Land billThe Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 seeks to Amend the Act of 2013 (LARR Act, 2013).
The Bill creates five special categories of land use:
1. defence,
2. rural infrastructure,
3. affordable housing,
4. industrial corridors, and
5. infrastructure projects including Public Private Partnership (PPP) projects where the central government owns the land.
The Bill exempts the five categories from provisions of the LARR Act, 2013 which requires the consent of 80 per cent of land ownersto be obtained for private projects and that of 70 per cent of land owners for PPP projects.

The Bill allows exemption for projects in these five categories from requiring Social Impact Assessment be done to identify those affected and from the restrictions on the acquisition of irrigated multi-cropped land imposed by LARR Act 2013.

The Bill brings provisions for compensation, rehabilitation, and resettlement under other related Acts such as the National Highways Act and the Railways Act in consonance with the LARR Act.

The Bill changes acquisition of land for private companies mentioned in LARR Act, 2013 to acquisition for ‘private entities’. A private entity could include companies, corporations and nonprofit organisations.

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