RBI joins in to fight Coronavirus in India; 3 months EMI exemptsTop Stories

March 27, 2020 12:45
RBI joins in to fight Coronavirus in India; 3 months EMI exempts

(Image source from: business-standard.com)

Just a day following the announcement of the INR 1.7 lakh crore relief package by the Finance Minister, Nirmala Sitharaman, the Reserve Bank of India (RBI) stepped in to do their part in fighting this coronavirus pandemic in India.

There have been a number of measures announced by the RBI to provide relief to the common people who are questioning their day to day expenses in this moment of crisis.

The first change is the imposed moratorium on the EMI expenses for the upcoming three months on loans was announced.

According to the statement released, it stated saying, “All commercial, regional, rural, NBFCs and small finance banks are being permitted to allow 3-month moratorium on payment of instalments in respect of all term loan EMIs outstanding on March 31.”

For the coming three months, as per the RBI advisory, no loan deductions will be done and the same will resume after the moratorium period is over.

This is expected to help out the individuals who are self employed and have been under a complete lockdown, affecting their overall income and financial stability in these times of crisis.

RBI Governor, Shaktikanta Das emphasised that this is the need of the hour and it is a war like nothing else that we have to combat together. He emphasised the importance of credit flow to the strained parts of the country during this time of crisis.

Das also highlighted the prospects of reduction in the repo rate and maintaining the accommodative stance as long as the same is needed. This is also going to be done keeping the risks of inflation in check.

Das also clarified that inflation is about to hit the world and it is not likely that India will be immune to the same as well. It all comes down to the kind of response that India reverts with.

The global slowdown will affect India, and for the worse. The food prices are also likely to soften on the record crop. In addition to that, the aggregate demand will reduce and that can ease the core inflation for the better.

Some of the other impacts and announcements surrounding the three way liquidity that Das mentioned include the following.

The auction of the targeted long term repo operations amounting to INR 1,00,000 crore at floating rate for a 3 year tenure

Reduction of the CRR for all the banks by the 100 basis points

Increase of the accommodation rate under the Marginal Standing Facility from 2% to 3%. This will result in release of INR 1.37 lakh into the society

Combining all three of these prospects is expected to release a total sum of INR 3,74,000 crore to the financial system of the country.

The RBI governor has clarified stating that the banking system is completely safe and won’t be affected as well. He emphasised and assured the Indians that they need not worry about their bank deposits at the moment.

By Somapika Dutta

If you enjoyed this Post, Sign up for Newsletter

(And get daily dose of political, entertainment news straight to your inbox)

Rate This Article
(0 votes)
Tagged Under :
RBI  coronavirus  relief package