Among other regulatory measures, the Indian central bank hiked the group exposure limit for banks to 30 per cent from 25 per cent.
The meeting assumes significance in light of the over Rs 20 lakh crore comprehensive economic package announced for the economy reeling under the COVID-19 crisis. Assuming economic activity gets restored in a phased manner especially in the second half of this year, and taking into consideration favorable base effects, it is expected that the combination of fiscal, monetary and administrative measures being now undertaken both by the government and the RBI could create conditions for a gradual revival in activity in the second half of 2021. Inflation may fall below 4 percent in the third or fourth quarter of the current fiscal, according to the Governor.
RBI is ready to use all its instruments to address the dynamics of an unknown future, says Shaktikanta Das.
The accumulated interest for the moratorium period can be converted into a term loan and does not have to be repaid immediately after the moratorium ends, he added.
The Reserve Bank of India (RBI) on Friday slashed interest rates, extended moratorium on loan repayments and allowed banks to lend more to corporates in an effort to support the economy which is likely to contract for the first time in over four decades. This makes it a total of six months moratorium on loan EMIs (equated monthly installment) starting from March 1, 2020.
RBI governor Shaktikanta Das says a facility of Rs 15,000 crore line of credit for 90 days for USA dollar swap facility will be provided to EXIM Bank. The finance minister announced several amendments, such as the minimum threshold would be increased to Rs 10 million from Rs 1 million, no new insolvency proceedings would be initiated for up to one year, and COVID-19-related debt would be kept out of the definition of default.
"In order to provide greater flexibility of SIDBI, another 90 days extension for the 90-day term loan facilities will be offered", said governor Das. Furthermore, the extension of the resolution timeline by 90 days from the existing 180 days would ease the additional provisioning requirement, offering some respite on provisioning to underlying banks, Motilal Oswal Securities said in financials sector update.
Monetary policy transmission has improved, says RBI governor Shaktikanta Das.
If inflation trajectory evolved as was expected, more space would be opened up to address risks to growth, Das said, keeping the doors open for further cuts.
There will be gradual revival of activity and demand by the second half of FY21, said RBI governor. He added that gross domestic product will remain in negative territory this year with some pickup in the pulses segment.
Speaking about the food inflation, the RBI governor said that the food inflation which had eased from the January peak in February and March has now surged to 8.6 per cent in April. Here, he said that price of vegetables, oilseeds, and milk emerged as pressure points. The biggest blow was to the private consumption slump with consumer durables production falling 33 percent.
Das said that there is a collapse in demand in both urban and rural areas since March. This, he said, has taken a toll on fiscal revenues.
"After extensive discussions, the MPC voted unanimously for a reduction in policy repo rate and for maintaining the accommodative stance of the monetary policy as long as necessary to revive growth and to mitigate the impact of COVID-19 while ensuring that inflation remains within the target", Das said.
Google Meet crosses 50 million downloads on Play Store
After September 30, the search giant will switch back to its 60 minute per call limit for users of the free version. As per AppBrain's data, Google Meet was at a relatively lower 5 million downloads at the beginning of March .