Friday, April 17, 2020

Discussed about various relaxation due to COVID-19. (RBI GOVERNOR)

RBI governor vide Press Conference dated 17.04.2020 thanked Corona Warriors, forefront of the battle against COVID-19 and discussed about various relaxation due to COVID-19.

Key Highlights of Press Conference :

1. Launch of TLTRO 2.0 worth Rs. 50,000 crore.

2. India expected to post a sharp turnaround in FY22 with 7.4% growth, as per IMF.

3. Announced a rate cut of 75 basis points.

4. Reverse repo rate is being reduced by 25 bps from 4% to 3.75% under Liquidity adjustment facility (LAF).

5. The TLTRO option of Rs. 25,000 crore is to be conducted today (April 17).

6. Financial conditions have eased considerably and activity in corporate bond market has picked up.

7. Focused on following measures announced by RBI :

(i.) Maintain liquidity in the system,

(ii.) Facilitate and incentivise bank credit flows,

(iii.) Ease financial stress,

(iv.) Enable formal working of markets.

8. Injected 3.2 percent of GDP into the economy by RBI to tackle liquidity situation.

9. LCR- Reduced from 100% to 80%.

10. NPA classification will exclude 90-day moratorium period.

11. LCR requirement of scheduled commercial banks being brought down from 100 percent to 80 percent with immediate effect and This shall be restores to 90 percent by October 2020 and 100 percent by April 2021.

12. Period of resolution plan for NPAs to be extended by 90 days.

13. Loans given by NBFCs to commercial real estate to get same relief.

14. Banks shall not make any dividend payments until further orders.

15. Rs. 50,000 crore special finance facility to be provided to financial institutions such as Nabard, Sidbi, NHB.

16. No change in repo rate which is decided by MPC.

17. Redemption pressures faced by some mutual funds have moderated.

18. Automobile production, sales declined sharply in March; electricity demand has fallen sharply.

19. ATM operations stood at 91%, no downtime on internet and mobile banking.

20. Additional regulatory measures being announced today, consistent with BASEL guidelines.

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