Rs 50k Crore Special Finance Facility For NABARD, SIDBI, NHB: RBI Gov   

Reserve Bank of India Governor Shaktikanta Das - Sakshi Post

MUMBAI: The Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the COVID-19 pandemic.

The central bank reduced the reverse repo rate - the rate at which banks park their fund with the central bank - by 25 basis points to 3.75 per cent. This will encourage banks to lend to the productive sectors of the economy.Economic activity came to standstill during lockdown , he said.

Highlights from his speech:

  • IMF projection of 1.9% GDP growth for India is highest in G20,
  • Banks, financial institutions have risen to occasion to ensure normal functioning during outbreak of pandemic
  • India is expected to post sharp turnround in 2021-22, says RBI Governor quoting IMF projection.
  • Automobile production, sales declined sharply in March; electricity demand has fallen sharply:
  • Impact of Covid-19 not captured in IIP data for Feb:
  • Surplus liquidity in banking system has increased substantially as result of central bank actions:
  • No downtime of internet or mobile banking during lockdown; banking operations normal
  • Contraction in exports in March at 34.6% much more severe than global financial crisis of 2008-09, says RBI Governor Shaktikanta Das
  • RBI to announce new measures to maintain adequate liquidity in system, facilitate bank credit flow, ease financial stress
  • Ways and means limit of states raised to help them, not bunch up their borrowing plans,
  • LTRO-2.0 to involve Rs 50,000 cr to begin with:
  • Rs 50,000 cr special finance facility to be provided to financial institutions such as Nabard, Sidbi, NHB:
  • RBI cuts reverse repo rate from 4% to 3.75%,
  • 90-day NPA norm not to apply on moratorium granted on existing loans by banks,
  • Banks not to make any further dividend payout in view of financial difficulties arising from COVID-19
  • LCR requirement of banks brought down to 80% from 100%; to be restored in phases by April next year
  • RBI will monitor evolving situation continuously, use all its tool to deal with pandemic fallout,
  • CPI inflation declined in March; inflation is on a declining trajectory
  • Loans given by NBFCs to real estate companies to get similar benefit as given by scheduled commercial banks

This was the second time that the Governor addressed the media since the nationwide lockdown was imposed from March 25th.

On March 27, RBI held a historic pre-term MPC (Monetary Policy Committee) meeting whererin the repo rate was cut by a record 75 basis points. The repo rate was reduced to a 15-year-low of 4.40 per cent and was also the steepest cut since October 2004.

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