Policy in 2 minutes

Monetary and liquidity measures

• Repo rate kept unchanged at 7.75%
• Cash Reserve Ratio (CRR) left at 4%
• SLR floor reduced 50 bps to 21.5%, effective February 7
• Export credit refinance (ECR) facility abolished

Macroeconomic parameters

• CPI-based inflation seen at 6% by January 2016
• GDP growth projection retained at 5.5% (old base)
• Central estimate for real GDP growth in 2015-16 is 6.5%
• Current account deficit seen at 1.3% of GDP for FY15

Regulatory measures

• Increase in limit for FX remittances under LRS to $250,000/ person per year from $125,000
• Proposes to allow non-callable deposits
• Forms external committee to vet payments bank, small finance bank licence applications

Corporate distress

• Freedom to extend DCCO for stalled projects involving management change with standard loan status
• Waiver from some pricing rules for converting loans into equity for restructuring cases

Financial markets

• Greater flexibility in pricing of debt instruments
• Facilitating reinvestment of coupons in G-sec despite existing limits being fully utilised
• Future investment by foreign investors in debt to be made with minimum residual maturity of 3 years
• Foreign investors will not be allowed to invest incrementally in short maturity mutual fund schemes
• Overnight MIBOR calculation to be shifted to transaction-based system by April