RBI reduces Repo Rate by 75 basis points to 4.4%: Key points

Here are the top updates from the RBI’s unscheduled monetary policy meet:

• Policy repo rate has been reduced by 75 basis points from 5.15 per cent to 4.4 per cent
• Reverse repo rate reduced by 90 basis points to 4 per cent
• Monetary Policy meet scheduled for March 31-April 3 was advanced to March 25-27
• Monetary policy committee voted 4:2 majority to cut repo rate by 75 basis points
• Reverse Repo Rate cut more so that banks are incentivised to lend: RBI governor
• Cash Reserve Ratio (CRR) of all banks have been reduced by 100 basis points to 3 per cent of net demand and time liabilities with effect from the fortnight beginning March 28 for a period of 1 year.
• All lending institutions are permitted to allow 3-month moratorium on payment of term loan installments: RBI governor
• RBI to inject liquidity worth Rs 3.74 lakh crore into the system
• Monetary policy committee refrained from giving out growth, inflation outlook for coming fiscal on uncertain outlook.
• India has locked down economic activity and financial markets are under severe stress.
• Finance is the lifeline of the economy, keeping it following is the paramount objective of the Reserve Bank of India at this point of time: Shaktikanta Das
• Moratorium on term loan, deferring of interest on working capital will not be classified as default, not to impact credit history of borrower: RBI
• Global slowdown can deepen with adverse implications for the country: Das
• Slump in crude oil prices upside for India; foodgrain prices may soften further on back of record production: RBI governor
• COVID-19 related volatility in stock market has impacted share prices of banks as well resulting in some panic withdrawal of deposits from a few private sector banks.
• It would be fallacious to link share prices to the safety of deposits. Depositors of commercial banks including private sector banks need not worry on the safety of their funds: RBI governor
• Banking system in India safe; deposits safe in private bank; public should not resort to panic withdrawal: Das
• RBI governor says all instruments — conventional and unconventional — are on table to support financial stability and revive growth.