WATCH the most important RBI briefing: From Repo rate slash to 3-month EMI moratorium

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday addressed the media via video conference, a day after the government announced a Rs 1.75 lakh crore package to help the poor and migrant workers tackle the financial difficulties arising from the 21-day lockdown imposed due to the Coronavirus pandemic. Here's a summary of his announcements: Key rates slashed: The Governor announced a reduction in the repo rate and the reverse repo rate. "The repo rate has been reduced by 75 basis points to 4.4 %. The reserve repo rate has been reduced by 90 basis points to 4%," Das said. The decision for "a sizeable reduction" in the policy repo rate, according to the RBI Governor was taken to "revive growth and mitigate the impact of COVID-19 and ensure financial stability." The Repo rate cut - which is the rate of interest at which banks borrow from RBI - will ensure banks have more access to funds, while the Reverse-Repo rate cut will make it less attractive for banks to park their funds with the central bank. No projections given due to Coronavirus-induced volatility: Inflation & growth projections would be highly subject to volatility - hence, no projection given, said RBI Governor, admitting that the 5.0% GDP growth forecast was under threat. EMI Moratorium: He said, "All commercial banks including regional rural banks, cooperative banks, NBFCs (including housing finance companies) and lending institutions are being permitted to allow a moratorium of 3 months on payment of instalments in respect of all term loans outstanding as on March 1." The moratorium will not result in asset classification downgrade and will have no adverse impact on credit history of beneficiaries. The Governor also said that the Indian banking system is "safe and sound" and depositors should not resort to panic withdrawal of their deposits. He urged those with deposits in private banks to not indulge in panic withdrawal. Measures were also announced and listed to shore up liquidity. The measures came a day after Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore Coronavirus lockdown relief package - divided between food security and DBT cash transfer. WATCH the full news conference here:

Advertisement

WATCH the most important RBI briefing: From Repo rate slash to 3-month EMI moratorium

RBI Governor Shaktikanta Das on Friday addressed the media via video conference, a day after the government announced a Rs 1.75 lakh crore package

Advertisement