RBI Joins Coronavirus Fight – All Loans EMIs Put on Hold For 3 Months

, RBI Joins Coronavirus Fight – All Loans EMIs Put on Hold For 3 Months

Reserve Bank of India (RBI) governor Shaktikanta Das announced today a massive 75 basis points cut in repo rates as a measure to counter the economic slowdown caused by the Coronavirus pandemic.

Highlights of the press conference are as below:

  • RBI repo rate cut by 75 basis points to 4.4%
  • All banks, lending institutions may allow a three-month moratorium on all loans
  • Lending companies, banks are allowed to defer interest on working capital repayments by three months. Banks may also reassess the working capital cycle and will not be treated as non-performing assets.
  • Investments will be classified as HTM, even in excess of 25% requirement. The first auction of Rs 25000 crore will be conducted later on March 27
  • LAF cut by 90 bps to 4%
  • Cash Reserve Ratio cut by 100 bps to 3% of NTDL with effect from March 28, 2020
  • Offshore Rupee NDF Market has been growing rapidly. Net Stable Funding Ratio (NSFR) was required to be introduced from April 1, 2020. Will defer NSFR implementation to October 2020
  • Appreciate RBI Governor Shaktikanta Das’ reassuring words on financial stability. The 3-month moratorium on payments of term loan installments (EMI) & interest on working capital gives much-desired relief. They slashed interest rate needs quick transmission.
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