"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," Modi said in a post on Twitter.
In an attempt to tackle impact of the coronavirus disease or COVID-19 on the economy, the RBI today announced a whopping 75-basis-point cut in the repo rate to 4.40%. The central bank has also taken steps to infuse 3.74 trln rupees into the system by cutting the Cash Reserve Ratio of banks and offering more funds through long-term repos and the Marginal Standing Facility.
In an unscheduled briefing, RBI Governor Shaktikanta Das said the meeting of the Monetary Policy Committee had been advanced to Mar 24 from the scheduled date of Apr 1 on account of the coronavirus outbreak. It also asked all commercial banks, cooperative banks, all-India financial institutions, and non-banking financial companies to allow a moratorium of three months on payment of instalments with respect to all outstanding term loans as on Mar 1, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by three months, RBI said in the statement.
RBI deferred interest payment on working capital facilities, which have been sanctioned in the form of cash credit/overdraft. It permitted lending institutions to allow a three-month deferral on payment of interest in respect of all such facilities outstanding as on Mar 1, 2020. Das said the accumulated interest for the period will be paid after the expiry of the deferment period.
