RBI cuts reverse repo rate by 25 bps to three.75%: Key facets

NEW DELHI: Reserve Bank of India (RBI) governor Shaktikanta Das on Friday addressed the media amid the ongoing coronavirus crisis. This comes like minded a day after Top Minister Narendra Modi met Union finance minister Nirmala Sitharaman to discuss contours of a proposed stimulus bundle to kick-initiate India’s stalled financial system.

Right here are the foremost facets from RBI governor‘s tackle:

Below liquidity adjustment facility (LAF), reverse repo rate (rate at which RBI borrows funds from banks) reduced by 25 foundation facets (bps) to three.75%; repo rate — rate at which RBI lends money to banks — unchanged (4.40%) as the decision is taken by the MPC (Financial Policy Committee)

RBI’s Rs 50,000 crore liquidity toughen: Rs 25,000 crore for NABARD (National Bank for Agriculture and Rural Constructing); Rs 15,000 crore for Sidbi (Small Industries Constructing Bank of India); Rs 10,000 crore for NHB (National Housing Bank)

90-day NPA (non-performing asset) norm no longer to seem at on moratorium granted on present loans by banks

LCR (liquidity coverage ratio) requirement of banks brought down to 80% from 100%; to be restored in phases by April subsequent One year

Banks no longer to invent any further dividend payout in stare of financial difficulties increasing from Covid-19

Within the duration forward, inflation can also even proceed further, barring obviously any provide facet disruptions and would possibly also resolve successfully below the target of 4 per cent by the 2d half of 2020-21

Covid-19: RBI has been very proactive and monitoring the discipline very carefully; it will video display evolving discipline constantly and exercise all its software to tackle pandemic fallout

On IMF projection: India is anticipated to submit interesting turnaround in 2021-22

IMF projection of 1.9% GDP enhance for India is absolute most life like in G20

Impact of Covid-19 no longer captured in IIP (index of industrial production) recordsdata for February

Automotive production, gross sales declined sharply in March; electrical energy predict has fallen sharply

Contraction in exports in March at 34.6% famous extra extreme than world monetary crisis of 2008-09

No downtime of internet or cell banking all the blueprint through lockdown; banking operations usual,

Surplus liquidity in banking machine has increased substantially as outcome of central monetary institution actions

Frontline workers (doctors/nurses/social) comprise proven a limiteless work

That is the RBI governor’s 2d press briefing since the Covid-19 outbreak. In his outdated tackle on March 27, he had announced a rate gash of 75 bps.

The extension of the lockdown till Could per chance also 3 has brought about new demands for a stimulus as firms are finding it advanced to pay salaries and meet other charges thanks to the loss of a mountainous fragment of their revenue.

In Video: Covid-19: RBI announces 25 foundation point reverse repo gash from 4% to three.75% now

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