Reserve Bank of India today asked all banks and lending institutions in the country to allow a three-month moratorium on all loans in view of coronavirus outbreak.
Talking to journalists in Mumbai, the central bank’s Governor Shaktikanta Das said, “Lending companies, banks are allowed tom defer interest on working capital repayments by three months. Banks may also reassess working capital cycle and will not be treated as non-performing assets.”
He announced a massive 75 basis points cut in repo rates as a measure to counter the economic slowdown caused by the COVID-19 pandemic.
He said the priority is to undertake strong and purposeful action to protect domestic economy. “Need for all stakeholders to fight against the pandemic and banks should do all they can to keep credit flowing,” he added.
Following are the highlights of his press meet:
1. Repo rate reduced by 75 basis points to 4.4%
2. Rev repo reduced by 90 basis points to 4%
3. GDP growth for Q4 19-20 and FY 20-21 to be affected
4. Aggregate demand may weaken
5. Future outlook uncertain and negative
6. CRR reduced by 100 basis points to 3% for 1 year to release 1.37 lakh crores
7. Min daily CRR balance reduced from 90% – 80% till 30/06/2020
8. 3.74 lakh crore liquidity injected
9. *3 month moratorium* on payment of instalments of Term Loan outstanding
10. Interest on WC facilities to be deferred by 3 months
11. Such deferment not to be classified as NPA
12. Revised DP calculations by reassessing WC cycle
13. All measures not to effect credit history
14. Total liquidity injection 3.4% of GDP