RBI Announcement in Covid-19 Phase – A Bold Move
The Governor of Reserve Bank of India on 27th March,2020 has declared various economic reforms to bring stability and liquidity in Indian economy and to sustain businesses at large.
The reduction of repo rate by 0.75% to make it 4.40% may bring stability and support to the economy.
The CRR for banks has been reduced by 1% and shall be implemented for one year. LAF will be at 4%.
Banks with IFSC banking units are allowed to participate in offshore INR NDF market w.e.f. June 1, 2020.
A moratorium of 3 months for Banks & NBFCs also declared on term loans. Such deferment will not to be considered for NPA.The accumulated payment will be done after this period.
Various deferment measures on working capital will be equally supportive.
There shall be total liquidity injection of 3.4% of GDP.