As part of the Central bank's first bi-monthly monetary policy statement for 2014-15.after taking office in September 13, RBI Governor Raghuram Rajan has kept the repo rate unchanged at 8% and the Cash Reserve Ratio at 4%.

He has raised the repo rate three times by a total of 75 basis points since he joined and also expressed his concern about risks to growth in an economy expanding at under 5 percent which is the slowest in a decade. He said growth in the fiscal year that began this month is expected in a range of 5 to 6 percent, with downside risks. The country's economic growth slipped to a decade-low of 4.5 per cent in 2012-13 and is estimated at 4.9 per cent in the current financial year. Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.


He also gave a word of caution in lieu of the upcoming elections and that if a stable government is not delivered this could have a considerable impact on the markets and a possible turmoil in the equity and the stock markets, if an unstable govt. comes to power and also reassured that the RBI is prepared for the turmoil.


As part of a consumer protection initiative, the Reserve Bank of India also asked banks not to levy penal charges on customers who don't maintain a minimum balance in basic savings bank accounts. Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to basic savings bank deposit accounts and restore the services when the balances improve to the minimum required level. Banks should also not levy penal charges if the minimum balance is not kept in any inoperative account, he added.