RBI reduces repo rate by 75 basis point, 3 month moratorium on EMI

Reserve Bank of India (RBI) governor Shaktikanta Das March 27 announced a massive 75 basis points cut in repo rates as a measure to counter the economic slowdown caused by the COVID-19 pandemic.

Reserve Bank of India has announced that banks are permitted to allow a 3-month moratorium on payment of instalments of all term loans outstanding on March 1, 2020. This decision applies to all regional, rural banks, co-operative banks, NBFCs including Housing Finance Companies.

The Governor announced a reduction in the repo rate and the reverse repo rate. “The repo rate has been reduced by 75 basis points to 4.4 %. The reserve repo rate has been reduced by 90 basis points to 4%,” Das said. The decision for “a sizeable reduction” in the policy repo rate, according to the RBI Governor was taken to “revive growth and mitigate the impact of COVID-19 and ensure financial stability.” The Repo rate cut – which is the rate of interest at which banks borrow from RBI – will ensure banks have more access to funds, while the Reverse-Repo rate cut will make it less attractive for banks to park their funds with the central bank.

Key points of RBI governor Shaktikanta Das Presser

CRR cut by 100 bps to 3%

REPO cut by 75 bps to 4.4%

ReverseREPO cut by 90bps to 4%

Cut in REPO,CRR&MSF to inject Rs 3.74 Lakh Cr of Liquidity

3 month Moratorium on Loans

News Desk

I am handling news desk for the news ark. I am post graduate in management.

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