Mumbai: The Reserve Bank of India Governor Shaktikanta Das on Friday announced a slew of measures to help the Indian economy.
Boosted by the IMF report which stated the Indian economy was performing better than other G20 nations despite the COVID-19 lockdown, he expressed confidence in the revival of the economy.
"Since March 27 the macroeconomic indicators have suffered significantly. In this context, the IMF report which has predicted a 1.9 per cent growth rate is a relief, as this is the highest amongst the G20 nations," he said.
He also thanked its officials for staying away from their families and ensuring the smooth operations of the apex bank.
Shaktikanta Das addressed the media at 10 am on Friday amidst the steep fall in the rupee and the continuing volatility in other segments of the financial markets.
Measures announced
1. Maintain adequate liquidity
•Sizeable net absorptions through reverse repo
•Help firms with liquidity constraints
•Exemptions from cash reserve ratio in specific areas
•Targeted Long Term Repo operations (TLTRO) worth Rs 50,000 crore as the first step
2. Special refinance facility of Rs 50,000 crore
•Rs 25,000 crore for NABARD
•Rs 15,000 crore for SIDBI
•Rs 10,000 crore for NHB
3. Fixed reverse repo revised by 25 bps from 4% to 3.75%. Policy repo rate remains the same
4.WMA limit to states revised: WMA (Ways and Means advances) limit of states increased by 60% for states to plan their borrowing better. WMA limit will be available till September 30
5. Moratorium
•3 month moratorium to lending institutions on March 27. 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
•Loans given by NBFCs to real estate companies to get similar benefit as given by scheduled commercial banks
The rupee fell 0.55 per cent to a new record low of 76.86 against the US dollar on Thursday, while the equity indices have been on a see-saw in the wake of the coronaviirus outbreak losing over 30 per cent since January.
This is the second time that the governor addressed the media since the nationwide lockdown was imposed from March 25.
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.
The same day, the central bank cut the cash reserve ratio by 100 bps to 3 per cent apart from announcing various measures to boost liquidity in the system.
There were calls that the 75 bps cuts was not sufficient and that RBI could go for more rate cuts and liquidity measures. Many brokerages had said RBI could slash the lending rates by another 100 bps.
