Here's a quick decoding of the RBI monetary policy review in December

Retail, MSME loans to be linked to an external benchmark

All new floating-rate personal, retail or micro, small and medium enterprise (MSME) loans from banks will be linked to one of the three external benchmarks prescribed by the RBI from April 2019.  The banking industry is wary of this. They feel it might lead to cut in margins.
 

The RBI believes a shift from the current marginal cost of funds-based lending rate to external benchmarks will bring greater transparency and standardisation to loan products  

SLR to be 18%, with quarterly cuts of 25 basis points (bps)

Banks are required to reach the minimum liquidity coverage ratio (LCR) of 100 per cent by January 2019. In order to align the statutory liquidity ratio (SLR) with the LCR requirement, the RBI proposed to reduce the SLR by 25 basis points every quarter until the SLR reaches 18 per cent of net demand and time liabilities (NDTL). Now, it is 19.5 per cent of NDTL

Expert committee on MSMEs 

An expert committee will be constituted by the RBI to identify causes and propose long-term solutions for the economic and financial sustainability of the sector. The composition of the committee will be finalised by the end-December. It will submit its report by end-June 2019

Non-residents to be given access to the interest rate derivatives market 
 

Non-residents will be allowed to hedge their rupee interest rate risk flexibly using any available IRD instrument. The RBI has issued draft directions

Mandatory loan component in working capital finance  

The RBI has mandated a minimum level of “loan component” in fund-based working capital finance for larger borrowers and issued final guidelines. This will be in effect from April 2019

Limited liability brought in for users of prepaid payment instruments  

The RBI has extended the limited liability regarding unauthorised electronic transactions to PPI customers as well. Previously, it only covered banks and NBFCs