RBI extends moratorium on loan repayments by three more months to August 31 | Economy News
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New Delhi: Reserve Bank of India (RBI) on Friday announced extension of loan moratorium by 3 more months to August 31.
“In view of the extension of the lockdown and continuing disruptions on account of COVID-19, it has been decided to permit lending institutions to extend the moratorium on term loan instalments by another three months, i.e., from June 1, 2020 to August 31, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by another three months,” Das said.
On March 27 the had RBI permitted all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) (referred to hereafter as “lending institutions”) to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020.
The RBI reduced the repo rate – by 40 basis points from 4.4 percent to 4 percent while the reverse repo gets adjusted to 3.35% from 3.75%.
Shaktikanta Das addressed a press conference announcing measures to ease the financial stress caused by the COVID-19 pandemic. This is his third press conference (the other two being on March 27 and April 17).
Revenues have been impacted severely due to slowdown in economic activity amid COVID-19 outbreak, Das said.
He added that headline inflation may remain firm in first half of the year and ease in second half, falling below 4% in Q3/Q4 of FY21.
The RBI Governor said that GDP growth in 2020-21 will be in negative territory.
“India seeing collapse of demand; dip in electricity, petroleum product consumption; fall in private consumption,” he said.
Combination of fiscal, monetary and administrative actions will create conditions for revival of economy in 2nd half of FY21, Das said.
He also added that inflation outlook is highly uncertain. “Elevated level of inflation in pulses worrisome, requires review of import duties,” he said.
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