Mumbai, March 27: Reserve Bank of India (RBI) Governor Shaktikanta Das called for a press conference on Friday on day three of the nationwide lockdown. He announced a slew of emergency measures to combat the effect of the COVID-19 on the economy. One of the major announcements was the huge reduction in the repo rate by 75 basis points and a 90 basis point reduction in the reverse repo rate. He also announced that banks, lending institutions may allow a three-month moratorium on all loans. Bank Loan EMIs: RBI Recommends 3-Month Moratorium And Interest Deferment on All Loans Amid COVID-19 Crisis.
Some of the important announcements made by RBI governor in today's press conference are the following:
Reduction in Repo & Reverse Repo Rates
The repo rate has been reduced from 5.15 percent to 4.4 percent. The reverse repo rate, on the other hand, has been reduced by 90 basis points to 4 percent. The markets opened in the green and touched 30,726.96, up 780 points during the press conference. However, it slipped from its day-low and went into the red zone after RBI Ysaid FY20 GDP Growth of 5 percent at risk.
GDP Growth at Huge Risk
Governor stressed that the need of the hour is to shield the domestic economy from COVID-19 pandemic. The financial activity is under serious threat. He further mentioned that the GDP growth will be adversely affected due to the COVID-19 pandemic. GDP Growth in India And Globally to be Adversely Affected Due to COVID-19 Impact, Says RBI Governor Shaktikanta Das.
Urged People to Cooperate With Government
Governor urged people to cooperate with the government and said that everyone should follow the rules set up the government and then we can fight the war against coronavirus.
All Banks to Allow 3-Month Moratorium
The RBI Governor today made the announcement that all banks, lending institutions may allow a three-month moratorium on all loans. Das said that the RBI has permitted banks to not just allow a three-month moratorium on all loans but also provide a three-month interest deferment on all loans.
Predicts a Big Recession Coming For All The World
Das predicted that a big recession is coming for all the world, and said that India won't be immune. He added that it all depends on how India will respond to the situation.
Stressed on the Need to Keep Credit Flowing
RBI governor warned that it is fight never seen before and there will be severe risks to the Indian government from coronavirus. He highlighted upon the need to keep the credit flowing to the stressed areas of the economy.
RBI press conference follows a day after Finance Minister Nirmala Sitharaman unveiled a Rs 1.7 lakh crore economic welfare package for the poor in the backdrop of the coronavirus pandemic. The rising number of coronavirus cases in the country has been a reason of worry and hence the PM decided a nationwide lockdown for 21 days to curb the spread of the deadly virus. Coronavirus Economic Package: Nirmala Sitharaman Announces Free Food, Cash Under Rs 1.7 Lakh Crore PM Garib Kalyan Yojana For Poor, Insurance Cover For Doctors And Other Frontline Workers.
On Thursday, the government announced a slew of measures including direct cash transfers and distribution of free food grains for a period of three months to help the economically weaker sections of the society tide over the crisis phase. The Health Ministry on Friday morning informed that the number of coronavirus infected cases rose to 724, and the death toll, on the other hand, has risen to 17 in India