PM Modi hails RBI's 'giant steps' as term loan EMIs get 3-month moratorium; Repo rate cut

Prime Minister Narendra Modi hailed the steps taken by the Reserve Bank of India (RBI) to safeguard the economy of the country while battling the deadly coronavirus. Addressing the media on Friday, RBI governor Shaktikanta Das announced a series of measures including slashing the repo rate and reverse repo rate, issuing a moratorium on EMIs for the next three months and more. PM Modi opined that the measures taken by the RBI will improve liquidity, ease the burden on the middle class and aid businesses. READ | 'Bold & Timely': NITI Aayog Hails RBI's Decision Of 3-month Moratorium, Slashed Repo Rate PM Modi welcomes RBI's measures Today @RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce cost of funds, help middle class and businesses. https://t.co/pgYOUBQtNl — Narendra Modi (@narendramodi) March 27, 2020 WATCH The Most Important RBI Briefing: From Repo Rate Slash To 3-month EMI Moratorium Here's a summary of RBI's 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. Indian banking system "safe and sound": 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. 3 month EMI moratorium on Term loans: All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) (“lending institutions”) are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, maybe shifted across the board by three months, the RBI's statement says. READ | Chidambaram Welcomes RBI's Repo Rate Cut But Calls EMI Moratorium Ambiguous & Half-hearted 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 the global Coronavirus pandemic. The Indian government had earlier projected GDP growth at 5% in 2019-20 as compared to 6.1% in 2018-19. Q3 had witnessed a 4.7% growth. India has announced a Rs 1.7 lakh crore Coronavirus relief package, split between assuring food security and Direct Benefit Transfer cash-transfer as the country observes a 21-day lockdown to combat COVID-19, of which over 700 infections have been confirmed thus far. READ | SIDBI To Provide Loans Up To Rs 50L To MSEs Manufacturing Med Supplies To Fight COVID-19

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PM Modi hails RBI's 'giant steps' as term loan EMIs get 3-month moratorium; Repo rate cut

PM Narendra Modi hailed the steps taken by the Reserve Bank of India (RBI) to safeguard the economy of the country while battling the deadly coronavirus

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