RBI takes decisive steps to tackle the Coronavirus crisis
RBI takes decisive steps to tackle the Coronavirus crisis

After a day the Government announced a relief package of Rupees 1.7 Lakh crores for the weakest sector in the society, the RBI announced a series of measures to ensure liquidity and stability in the country’s financial system as the world battles Coronavirus pandemic.

The key highlights are:

  • Repo rate and reverse repo rate have been cut by 74 bps and 90 bps respectively.
  • All commercial banks and lending institutions can now allow a three-month moratorium on all loans outstanding on 1 March 2020.
  • Cash reserve ratio (CRR) of all banks to be cut by 100 bps to 3%.
  • Incremental CCB (capital conservation buffer) implementation deferred from 30 March 2020 to 30 September 2020.
  • Net Stable Funding Ratio (NSFR) was required to be introduced from 1 April 2020. Will defer NSFR implementation to October 2020.
  • The RBI also decided to widen the monetary policy rate corridor. Lending institutions can defer by three months payment of interest outstanding as on March 1 on working capital facilities sanctioned in the form of cash-credit and overdraft and such. The accumulated interest for the period will be paid at the end of the deferment period.

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