Dilip Chenoy, secretary-general, Federation of Indian Chambers of Commerce and Industry (FICCI) lauded the Reserve Bank of India's (RBI) decision to slash the repo rate and reverse repo rate and extension of the loan repayment moratorium.
Bengaluru: RBI governor Shaktikanta Das announced a slew of measures to tackle the ongoing economic slump, all thanks to the coronavirus pandemic.
Dilip Chenoy, secretary-general, Federation of Indian Chambers of Commerce and Industry (FICCI) lauded the Reserve Bank of India's (RBI) decision to slash the repo rate and reverse repo rate and extension of the loan repayment moratorium.
He said, "The announcements made by RBI Governor this (Thursday) morning regarding the reduction of repo rate and reverse repo rate and extension of the loan repayment moratorium for another three months are very important and good steps."
"The steps announced by the RBI after the announcement of Atmanirbhar Bharat package will be very profitable for both small-scale and large industries in the country. FICCI welcomes these decisions," he added.
Here are the key takeaways (as reported by Economic Times)
Liquidity support: There is a reduction of repo rate by 40 basis points to 4 per cent from 4.4 per cent. Consequently, the reverse repo rate now stands at 3.35 per cent.
Moratorium extended: A further three-month extension up to August 31, 2020 on the following:
1. Term loan instalments
2. Deferment of interest on working capital
3. Easing of working capital financing requirements by reducing margins
4. Exemption from being considered as defaulter in supervisory reporting and reporting to credit information companies
5. Extension of resolution for stressed assets, asset classification standstill by excluding moratorium period of three months.
Growth Outlook: On economic growth in the current fiscal, the RBI projected negative growth with a pick up in growth impulses in second half. However, these depend on the trajectory of the pandemic.
Inflation Outlook: Headline inflation may fall below the RBI's medium term target of 4% in third or fourth quarter of the current fiscal.
Demand & Supply: The governor said that the private consumption, which comprises 60 per cent of the GDP, has taken the biggest hit. Both the demand compression and supply disruption has taken a toll on the economy, the governor observed.
Foreign trade: Line of credit of Rs 15,000 crore for 90-days with roll over of up to one year so as to enable it to avail US dollar swap facility.
SIDBI: The special refinancing facility of Rs 15,000 cr to SIDBI at repo rate for 90 days for lending & refinance operations has been further rolled over for another 90 days at the end of initial 90 days period.
4. Exemption from being considered as defaulter in supervisory reporting and reporting to credit information companies
5. Extension of resolution for stressed assets, asset classification standstill by excluding moratorium period of three months.
Read Exclusive COVID-19 Coronavirus News updates, at MyNation.