DELHI: With Coronavirus outbreak and lockdown 4.0 prevailing in the country, Reserve Bank of India (RBI) Governor Shaktikanta Das today announced several monetary easing measures, including extending moratorium on loan repayments by another three months, and an emergency cut in the repo rate.
This is the third time since the lockdown imposed in the country that the RBI announced relief. In the latest press conference conducted on Friday, RBI has allowed deferment of repayments of loans by another three months from June 1 to August 31 due to lockdown extension. The RBI governor also announced that the RBI has reduced the repo rate by 40 basis points from 4.4% to 4%.
The reverse repo rate is kept at 3.35% to maintain an adjusted stance. RBI offered 90-days extension to SIDBI for the 90-day term loan facilities. The central bank offered 90-days extension to SIDBI for the 90-day term loan facilities in order to provide additional liquidity support to the MSME sector. In the wake of the ongoing coronavirus pandemic, RBI said that financial year 2020-21 GDP is expected to remain in negative so far.
NITI Aayog CEO Amitabh Kant welcomed the measures taken by the RBI governor Shaktikanta Das on Friday and said, “great to see the repo rate cut by 40 Bps to 4 percent for extending the moratorium. Now we need a one-time restructuring of loans for seriously impacted sectors.”
Repo rate: The repo rate is the rate at which the RBI lends money to the banking system (or banks) for short durations.
—– Mahesh Ahuja