RBI's Package

Reserve Bank of India (RBI) has reduced the Repo Rate by 75 basis points to 4.4% and Reverse Repo Rate by 90 basis points to 4%. This has been declared by RBI Governor Shri Shaktikanta Das in a press conference, here today (March 27, 2020). He further stated that CRR of all banks is to be reduced by 100 basis points to 3% with effect from 28 March for one year. These measures will inject liquidity of Rs 3.74 lakh crore to the system. 

In another major announcement, the Governor said, 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), that is, lending institutions, are being permitted to allow a moratorium of three months on payment of installments in respect of all term loans outstanding as on March 1, 2020.                                                                                             

Further, the Governor announced that, in respect of working capital facilities sanctioned in the form of cash credit/overdraft, lending institutions are being permitted to allow a deferment of three months on payment of interest in respect of all such facilities outstanding as on March 1, 2020. The accumulated interest for the period will be paid after the expiry of the deferment period. Also, the moratorium on term loans and the deferring of interest payments on working capital will not result in asset classification downgrade.