3 Months Relief On EMIs Of Term Loans
As the nation is fighting the menace of COVID-19 relief measures are coming in from the government. Yesterday Finance Minister Nirmala Sitharaman unrolled the ‘1.7 lakh’ relief package amidst 21 days lockdown.
As the nation is fighting the menace of COVID-19 relief measures are coming in from the government. Yesterday Finance Minister Nirmala Sitharaman unrolled the ‘1.7 lakh’ relief package amidst 21 days lockdown.
RBI’S BAZOOKA! !
— Mangalam Maloo (@blitzkreigm) March 27, 2020
1) Cuts Repo rates by 75 Bps, Reverse repo by 90 Bps
2) CRR Cut by 100 Bps
3) To make banks buy Corp Bonds
4) Allows banks to hedge currency risk via derivatives
5) 3 month moratorium on interest and principal repayments
RBI STANDS TOUGH!@DasShaktikanta @RBI
On Friday it was Reserve Bank of India’s (RBI) governor who came in with some measures. RBI Governor Shaktikanta Das announced the reduction of 75 basis points in the repo rate to 4.4%. On the other hand, reverse repo-rate has been reduced by 90 basis points to 4%. This means taking loans would be cheaper from the banks. The reduction in repo rate was a historic as it was the biggest cut by RBI so far. The announcements were part of RBI’s bi-monthly policy.
Today @RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce cost of funds, help middle class and businesses. https://t.co/pgYOUBQtNl
— Narendra Modi (@narendramodi) March 27, 2020
The big relief was there for EMI payers. Governor Das also permitted banks to have a 3-month moratorium on the repayment of installments for term loans outstanding as on March 1, 2020. Further deferment of 3 months on interest payment on working capital facilities is also allowed. PM Narendra Modi termed the announcement as a ‘giant step‘.
However, only the banks will decide which loan they want to give EMI exemption. This means that there is still a kind of confusion for people taking retail, commercial or other types of loans. The cash reserve ratio (CRR) has also been reduced by 100 basis points to 3 percent. This has been done for a period of up to one year.
