RBI makes a bold move to fight COVID-19 damages


RBI makes a bold move to fight COVID-19 damages

The Reserve Bank of India has folded its sleeve to combat the damages caused by the biggest pestilence coronavirus. The day after Modigovt made a bold move of initiating the economic rescue worth Rs 1.70 lakh crore coronavirus counter, RBI came up with bunch of measures that could mend the economic havoc taken place in India.

These measures come just hours after Moody's Investors Service cut India's growth forecasts for 2020 calendar year to 2.5% from 5.3 per cent.The MPC decided by four to two majority to reduce repo rate by 75 basis points to 4.4 per cent. The reverse repo rate was cut by 90 bps to 4 per cent, creating an asymmetrical corridor.

This initiative includes a suspension of EMIS for three months on all outstanding loans.To support the cause a statement was released which says, “All commercial, regional, rural, NBFCs and small finance banks are being permitted to allow three month moratorium on payment of instalments in respect of all term loan EMIs outstanding on March 31.”

It appears that for the next three months, EMI will notbe deducted from anyone’s accountthat has a loan outstanding. And all this without any hit on credit score. EMIs will resume after the moratorium period gets over. This step taken by RBI is definitely a great relief for all EMIpayers, especially the ones who are self-employed whose income had become uncertain in the wake of the lockdown.

This three month moratorium will be applicable to corporate loans, home loans and car loans. Personal loans will also qualify for this. But credit card dues won’t be part of this moratorium as it’s not a term loan.

“Global slowdown could make things difficult for India too, despite some help from falling crude prices, he said. Food prices may soften further on record crop, he added. Aggregate demand may weaken and ease core inflation further,” informs Shaktikanta Das.