Posted on March 30, 2020, 2:48 PM IST
In an important press conference today Reserve Bank of India (RBI) governor Shaktikanta Das announced a series of colossal measures to counter the economic slowdown caused by the novel coronavirus pandemic. This comes a day after finance minister Nirmala Sitharaman released a ₹1.7 lakh crore package to help the poor and needy tackle problems owing to 21-day lockdown across the country. Prime Minister Narendra Modi applauded the financial moves taken by RBI to safeguard the economy from the impact of the coronavirus.
Here are the key takeaways from RBI governor's address:
1) Repo rate and reverse repo rate have been cut by 74 bps and 90 bps respectively. "The repo rate has been reduced by 75 basis points to 4.4 per cent. The reserve repo rate has been reduced by 90 basis points to 4 per cent," Das said addressing the media. Repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks.
2) All commercial banks and lending institutions can now allow a three-month moratorium on all loans outstanding on 1 March 2020.
3) Cash reserve ratio (CRR) of all banks to be cut by 100 bps to 3%. Cash reserve ratio is the amount of cash commercial banks have to mandatorily park with the Reserve Bank of India.
4) Incremental CCB (capital conservation buffer) implementation deferred from 30 March 2020 to 30 September 2020.
5) Net Stable Funding Ratio (NSFR) was required to be introduced from 1 April 2020. Will defer NSFR implementation to October 2020.