Interest Rates Decreased by RBI- Press Conference on 27th March 2020.
Some Important points you need to know •Rate cut- RBI cuts its Repo rate by 75 basis point leaving the repo rate to 4.4%. Repo Rate is a Rate at which RBI lends money to commercial bank in the event of shortfall of funds. •RBI Cuts its Reverse Repo Rate by 90 basis points leaving the reverse repo rate to 4%. Reverse repo rate is a rate at which Commercial banks borrows funds from RBI. •This is done to let banks to pay less to RBI and utilize those funds to strengthen the economic sector of the nation. •It has been decided to reduce CRR by 100 basis point to 3%. Cash Reserve Ratio(CRR) is a percentage of banks Deposits, banks need to keep with RBI. •Reduce the minimum requirement to maintain daily CRR from 90%-80% with RBI. •SLR- 2% to 3%. •All banks and lending institution are being permitted to allow a moratorium of 3 months on all terms loans outstanding on 1st march 2020. •Working capital – Deferment of payment of Interest for 3months on all the working capital loans or Limits. Interest will be paid after the end of moratorium period. •Moratorium Period will not result in asset classification downgrade. • Working capital limits, over drafts and loans will also available at ease through banks and other lending institutions. •NSFR (Net Stable Funding Ratio)– Defer the implementation of NSFR from 1st April to 1st Oct 2020. •Governor – RBI will continue to remain vigilant and take necessary steps to fight COVID 19 in the country.
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