Published 10:04 IST, August 7th 2020
RBI announces one-time loan restructuring scheme for firms and individuals amid COVID-19
Reserve Bank of India announced loan restructuring scheme to be extended to individuals, besides cement, hotels, airlines and steel companies hit by COVID-19
The Reserve Bank of India on Thursday announced a blanket loan restructuring program to be extended to individuals, besides cement, hotels, airlines and steel companies hit by the COVID-19 pandemic. The scheme is said to be the first since the 2008 financial crisis. The steps are seen as an attempt by RBI to offer a helping hand amid the "worst peacetime health and economic crisis of the last 100 years" caused by the COVID-19 pandemic which has taken the world hostage at large.
READ | Easy Liquidity Led To Faster Monetary Transmission; Banks Pass On 1.62% Rate Cuts In 17 Mths: RBI
Inflation to elevate during the second quarter
RBI governor Shaktikanta Das said inflation is expected to be at elevated levels during the second quarter; however, may ease in the second half of the current fiscal year. He said that supply chain disruptions persist, resulting in inflation pressures across segments. He also said that global economic activity has remained fragile and the surge in COVID-19 cases has subdued early signs of revival. Pinning hope on the agriculture sector, he said, Kharif crop harvest is expected to boost rural demand. Economic activity had started to recover, but a surge in coronavirus infections has forced imposition of lockdowns, he added.
Real GDP growth will remain in the negative zone for now
"Taking into consideration all factors, the GDP growth in the first half of the year is estimated to remain in the contraction zone. For the year 2020-21 as a whole, real GDP growth is also estimated to be negative", Das said.
The Monetary Policy Committee (MPC) of the RBI decided to keep the repo rate unchanged at 4 percent.
"The accommodative stance of the monetary policy will continue as long as necessary to revive growth and mitigate the impact of the pandemic while ensuring that inflation remains within the target going forward. The marginal standing facility rate and the bank rate remains unchanged at 4.25 percent and the reverse repo rate also stands unchanged changed at 3.35 percent", RBI Governor said while addressing the press.
(With inputs from ANI)
Updated 10:04 IST, August 7th 2020