RBI extends moratorium on term loans by 3 more months, cuts repo rate from 4.4% to 4%
New Delhi | Jagran Business Desk: The Reserve Bank of India (RBI) on Friday announced that it has decided to extend moratorium on term loans by three more months from June 1 to August 31 in wake of the extension of the coronavirus lockdown.
Addressing his third press conference in less than two months, RBI Governor Shaktikanta Das said that the GDP growth in 2020-21 is expected to remain in the negative category with some pick up in second half.
The RBI Governor also announced that the central bank has decided to cut the repo rate cut by 40 basis points from 4.4 per cent to 4 per cent, adding that the reverse repo rate has been reduced to 3.35 per cent.
"Measures announced today can be divided into four categories: to improve functioning of markets,to support exports and imports,to ease financial stress by giving relief on debt servicing and better access to working capital and to ease financial constraints faced by state governments," news agency ANI quoted Das as saying.
Das also announced that the central bank has decided to increase the Group Exposure Limit of banks from 25 per cent to 30 per cent of eligible capital base for enabling the corporates to meet their funding requirements from banks. He said that the increased limit will be applicable up to June 30, 2021.
The RBI also relaxed rules governing withdrawal from consolidated sinking fund (CSF) that will enable states to meet about 45 per cent of redemption of their market borrowings which are due in 2020-21.
Das said that India's foreign exchange reserves have increased by 9.2 billion during 2020-21 and the foreign exchange reserves stand at 487 billion US dollars till May 15.
"Amidst this encircling gloom agriculture and allied activities have, however, provided a beacon of hope on the back of an increase of 3.7 per cent in food grain production to a new record," Das said, as quoted by ANI.
The RBI Governor also said that industrial production shrank by close to 17 per cent in March with manufacturing activity down by 21 per cent while output of core industries contracted by 6.5 per cent.
Posted By: Aalok Sensharma