Key announcements of RBI on financial condition | Fusion - WeRIndia

Yesterday Reserve Bank of India Governor Shaktikanta Das addressed the media yesterday and made several key announcements on the present financial condition of the country. The announcements are made to improve liquidity in the market.

Here are the key highlights of the RBI:

• The RBI slashed Reverse Repo Rate by 25 basis points, from 4 per cent to 3.75 per cent while keeping the Repo rate same.
• ₹50,000 crores have been announced for targeted long-term refinancing operations (TLTRO 2.0). Half of these funds are for small and medium-sized NBFCs.
• ₹50,000 crores have been announced as a special financial facility for financial institutions such as NABARD, SIDBI and NHB.
• RBI governor Das said that IMF projected the country’s GDP growth rate as 1.9 per cent in the financial year 2020 which is highest among all G20 countries. A sharp increase is expected with a projected GDP rate of 7.4 per cent in 2021-22.
• Das said that the agriculture and banking sectors were working normally in March, yet, automobile production and sales declined sharply. The demand for electricity also dropped.
• He said that banks are working smoothly including net banking and mobile banking. ATMs have worked at 91 per cent capacity.
• The funds to states have been raised to 60 per cent under the Ways and means to help them.
• The three-month moratorium period will be excluded while classifying NPA.
• Banks will have to maintain additional provisioning of 10 per cent on standstill accounts. They won’t announce dividends until further notice from the RBI.
• Liquidity coverage ratio (LCR) requirement has been brought down from 100 per cent to 80 per cent and this will come into effect immediately.
• The prices of LPG have been dropped 8 per cent while the prices of food items haven been escalated by 2.3 per cent.

Image Credit: Press Information Bureau, Government of India / CC BY 3.0

Image Reference: https://commons.wikimedia.org/wiki/File:Shaktikanta_Das,_IAS.jpg