MASSIVE: RBI announces 3-month moratorium on EMI installments of all term loans

In a massive decision, Reserve Bank of India has anunced that banks are permitted to allow a 3-month moratorium on payment of instalments of all term loans outstanding on March 1, 2020. This decision applies to all regional, rural banks, co-operative banks, NBFCs including Housing Finance Companies.

moratorium will t result in asset classification downgre and will have  verse impact on credit history of beneficiaries.

Measures also anunced to ensure liquidity

This is a part of Central Bank's measures to counter Coronavirus lockdown, which h started off with RBI goverr anuncing massive slash in key repo rate to 4.4%, to revive ecomic growth. Measures have also been anunced to ensure liquidity.

latest rate cut is by far biggest by central bank among a series of cuts that have been a highlight of Shaktikanta Das' tenure as Goverr. However, latest measure, which has come as an emergency measure and t within RBI's bi-monthly policy-review framework, is three times size of cut generally applied.

Here's a summary of his anuncements:

Key rates slashed: Goverr anunced a reduction in repo rate and reverse repo rate. " repo rate has been reduced by 75 basis points to 4.4 %. reserve repo rate has been reduced by 90 basis points to 4%," Das said. decision for "a sizeable reduction" in policy repo rate, according to RBI Goverr was taken to "revive growth and mitigate impact of COVID-19 and ensure financial stability." Repo rate cut - which is rate of interest at which banks borrow from RBI - will ensure banks have more access to funds, while Reverse-Repo rate cut will make it less attractive for banks to park ir funds with central bank.

projections given due to Coronavirus-induced volatility: Inflation & growth projections would be highly subject to volatility - hence, projection given, said RBI Goverr, mitting that 5.0% GDP growth forecast was under threat.

Indian banking system "safe and sound": Goverr also said that Indian banking system is "safe and sound" and depositors should t resort to panic withdrawal of ir deposits. He urged those with deposits in private banks to t indulge in panic withdrawal. Measures were also anunced and listed to shore up liquidity. 

This comes after minutes after influential Moody's Investors Service slashed India's 2020 GDP growth projection from its earlier forecast of 5.3% to 2.5% amid global Coronavirus pandemic. Indian government h earlier projected GDP growth at 5% in 2019-20 as compared to 6.1% in 2018-19. Q3 h witnessed a 4.7% growth. India has anunced a Rs 1.7 lakh crore Coronavirus relief pack, split between assuring food security and Direct Benefit Transfer cash-transfer as country observes a 21-day lockdown to combat COVID-19, of which over 700 infections have been confirmed thus far.

WATCH full briefing here:

RE | BREAKING: RBI cuts Repo Rate by massive 75 bps to 4.4% to revive growth amid Coronavirus

RE | BIG: Moody's revises India's 5.3% GDP growth forecast amid Coronavirus; new figures here