Reserve Bank of India (RBI) Governor Shaktikanta Das today announced new measures to boost liquidity, expand bank credit flow and ease financial stress. To benefit NBFCs and micro-financial institutions, the central bank said it will conduct targetted long-term repo operations (TLTRO) 2.0 worth ₹50,000 crore in t. After cutting the benchmark lending rate by 75 bps three weeks ago, the RBI today cut the reverse repo rate to 25 basis points to 3.75%. The central bank has also asked all banks to not make any dividend payments to shareholders keeping in mind the financial challenges during the Covid-19 pandemic.
-RBI will monitor evolving situation continuously, use all its tool to deal with pandemic fallout.
-Loans given by NBFCs to real estate companies to get similar benefit as given by scheduled commercial banks.
-LCR requirement of banks brought down to 80% from 100%; to be restored in phases by April next year:
-Inflation is on a declining trajectory, could recede even further:
-Banks shall not make any dividend payments until further orders:
-NPA classification for banks will exclude the moratorium period:
-Economic activities have come to a standstill during lockdown:
– ₹50,000 crore special finance facility to be provided to financial institutions such as Nabard, Sidbi,
-No change in repo rate which is decided by MPC:
-Reverse repo rate cut by 25 bps to 3.75%.
New measures aimed at maintaining adequate liquidity in system, facilitate bank credit flow, ease financial stress.
-TLTRO 2.0 operations of ₹50,000 crore will be conducted.
-To maintain adequate liquidity in the system, we have decided to take additional measures.
-Redemption pressures faced by some mutual funds have moderated.
-Automobile production, sales declined sharply in March; electricity demand has fallen sharply.
-Covid-19 impact is not captured in IIP data for Feb.
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