The Governor of Reserve Bank of India (RBI) – Shaktikanta Das today, i.e., Friday, May 22, 2020 announced a slew of measures including further reduction in repo rate and extension of moratorium on term loan EMIs.
The new measures have been announced as the economy continues to be severely hit by the ongoing lockdown, caused by the Coronavirus (COVID-19) outbreak. The biggest blow to the economy came from the slump in private consumption. Consumer durables production reduced 33% in the March 2020. Service sector, passenger and commercial vehicle sales, domestic air passenger traffic and foreign tourist arrivals also slumped.
Addressing a Press Conference, Shaktinanda Das announced to cut the repo rate by 40 Basis Points (BPs) to 4%. The reverse repurchase rate was reduced to 3.35% from 3.75%. This rate cut is expected to bring down the lending and deposit rates.
He also announced extension of loan moratorium on term loans by another 3 months until August 31, 2020. Earlier in March 2020, RBI had also allowed a 3-month moratorium on payment of all term loans due between March 1, 2020 and May 31, 2020. RBI has also allowed the lending institutions to convert the accumulated interest on working capital facilities over the total deferment period of 6 months (i.e. March 1, 2020 up to August 31, 2020) into a funded interest term loan which shall be fully repaid during the course of the current financial year, ending March 31, 2021.
Speaking on the occasion, Shaktinanda Das said, “The RBI will continue to remain vigilant and in battle readiness to use all its instruments and even fashion new ones, as the recent experience has demonstrated, to address the dynamics of the unknown future.”
Meanwhile, India recorded its highest number of cases in a single day with 6,088 fresh cases and 148 casualties. Maharashtra witnessed highest number of cases in a single day with 2,940 cases. Of this, Mumbai recorded 1,751 new cases. Asia’s biggest slum in Mumbai, Dharavi recorded 53 new cases. Overall, Maharashtra continues to be the worst hit State with 41,642 cases and 1,454 casualties. Tamil Nadu, the second worst affected State, has a total of 13,967 and 94 casualties. It recorded 786 new cases today. The third worst affected State, Gujarat saw 363 new cases today, taking the total figure to 12,905 cases and 773 casualties. Karnataka saw a rise of 138 cases and West Bengal saw a rise of 135 new cases.
In other developments, the Cabinet Minister of Tourism and Environment, Government of Maharashtra – Aaditya Thackeray has slammed the Bhartiya Janata Party (BJP) over a picture of children, who are seen participating in the protests organised by BJP, criticising Shiv Sena for not handling the COVID-19 properly.
Taking it to twitter, he tweeted, “Absolutely shameful, what lust for power politics can make leaders do. Making kids stand in the heat, with their masks lowered, not covering the face for a political protest when we need to keep them safe and indoors. Corona ko bhul gaye, politics pyaara hai.”
Absolutely shameful, what lust for power politics can make leaders do. Making kids stand in the heat, with their masks lowered, not covering the face for a political protest when we need to keep them safe and indoors. Corona ko bhul gaye, politics pyaara hai. pic.twitter.com/fmxFKUdssB
— Aaditya Thackeray (@AUThackeray) May 22, 2020
As per the Ministry of Health and Family Welfare (MoHFW), there are more than 1,18,447 cases in India and there have been 3,583 casualties.
