RBI policy review: 12 statements by Raghuram Rajan you should not miss

The Reserve Bank of India on Tuesday left key policy rates and cash reserve ratio unchanged in its third bi-monthly monetary policy of the current financial year. Here are the 10 key statements made by Governor Raghuram Rajan:

1. On the economy: "Economic recovery is still work in progress. It is prudent to keep the policy rate unchanged at the current juncture while maintaining the accommodative stance of monetary policy based on factors like transmission of RBI cuts by banks into their lending rates, food prices and monsoon, action from the government on the supply side and signs of normalisation in the US. As the RBI awaits greater transmission of its front-loaded past actions, it will monitor developments for emerging room for more accommodation."
2. RBI retains growth target at 7.6 per cent for 2015-16: "The outlook is improving gradually. However, the contraction in exports could become a prolonged drag on growth going forward."
3. On inflation: "The June reading of 5.4 per cent has resulted in the projections being elevated, but will meet the 6 per cent target for early 2016. Hardening of inflation, excluding food and fuel, is most worrisome. The impact of the hike in service tax rates to 14 per cent in June will flow into the inflation reading through the year."
4. On mid-policy rate cut: "There was more need to move fast in the early stages of the turnaround, we will take all the information into account and decide whether at times it warrants moving in-between policy cycles or it doesn't."
5. On composition of monetary policy committe: "Need to await the MPC details, they will be made public. RBI and government have reached consensus on composition of MPC and what the Governor's power would be."
6. On RBI powers in monetary policy committee: "Currently, the situation is governor has a veto, that is, effectively all advice is only advice and ultimately decision is Governor's. So, if we continue to retain a veto, it doesn't change the current situation. It maintains the status quo."
7. On monetary policy committee being institutionalized: "RBI is enthusiastic supporter of interest-setting Monetary Policy Committee. RBI wants MPC to be institutionalised, its ultimate responsibility is on Governor."
8. On foreign investment in banks: "RBI is talking to the government to hike foreign portfolio investment cap in banks in medium term."
9. Another round of awarding banking licences: "At least first set of differential bank licences to be announced before end of August."
10. On capital infustion in PSU banks: "Govt's capital infusion in PSBs to help loan growth and transmission of interest rate cuts as well as ease liquidity."
11. On banks not passing benefits of rate cuts to consumers: "Banks have only passed on an average 0.3% interest rate cut as against its 0.75% rate cut since January."
12. On fall in oil prices: "Fall in oil prices is very beneficial for India. One of the reasons for the strength of rupee is falling price of oil which has brought down current account deficit."