Shaktikanta Das, the governor of RBI or Reserve Bank of India, has made an announcement lately. The announcement is about 75 basis points cut in the RBI Repo rate. The step has been taken to face and deal with the impact of fatal COVID-19 outbreak on the Indian economy.
A day before, Union Finance Minister Nirmala Sithraman revealed specific measures in order to make the country capable of dealing with the severe economic blow of 21 days complete lockdown. Honorable Prime Minister of India Narendra Modi has locked down the entire country and requested the citizens to maintain social distancing in order to break the chain of coronavirus contamination.
Following are the major key points from RBI’s unscheduled policy meet, that you should take note of:
- The reverse repo rate has been reduced by 90 basis points to a mere 4%.
- The reduction has been made in the policy repo rate by 75 basis points, from 5.15% to 4.4%.
- The monetary policy meet that was to be held from March 31 to April 3, has been rescheduled to be held from March 25 to March 27.
- All the lending institutions will be able to allow a three months’ moratorium on the payment of installments of term loans.
- In all the banks, CRR or cash reserve ratio has reduced by 100 basis points to just 3% of net demand and time liabilities. This will be valid from the fortnight on March 28 onwards.
- RBI will be injecting liquidity worth Rs 3.74 lakh crore.
- According to Das, the public should refrain from panic withdrawal as deposits are entirely safe in Indian banks.
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