Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced the reduction of repo rate considerably to help the country’s financial system tide over the coronavirus disease pandemic.
The Monetary Police voted to reduce repo rate by 75 basis points – to 4.4 per cent. The reverse repo-rate reduced by 90 basis points to four per cent,” Das said at a press conference in Mumbai.
“It will now be unproductive for the banks to park money with the RBI, they will have to give it to the people,” said Das.
“Tough times never last, only tough people and tough institutions do,” he added.
This comes a day after a relief package announced by the government to clear the economic mess due to coronavirus pandemic.
In a move aimed at mitigating the impact of the coronavirus outbreak on businesses and employees in India, the Reserve Bank of India on Friday asked all banks and other lending institutions to allow a three-month moratorium on all kinds of loans. The RBI also said that moratorium on term loans and deferment of interest payment would not result in asset classification downgrade.
The apex bank also said all lending institutions and banks had been allowed to defer interest on working capital repayments by three months. The RBI also allowed banks to reassess the working capital cycle and said that they won’t be treated as non-performing assets.