Federation of Indian Chambers of Commerce and Industry (FICCI) Secretary-General Dilip Chenoy on Friday 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. Earlier in the day, the RBI reduced the repo rate by 40 basis points to 4 per cent and extended the loan repayment moratorium for another three months. The reverse repo rate now stands at 3.35 per cent.
FICCI welcomed RBI's move to cut the repo rate, extend loan repayment moratorium. Chenoy also welcomed the RBI's decision to extend a credit line of Rs 15,000 crore to the Export-Import (EXIM) Bank of India to provide financial assistance to exporters and importers with a view to promoting the country's international trade.
"The announcements made by RBI Governor this 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," Chenoy told reporters.
"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.
This comes as the country has been under lockdown for nearly two months to prevent the spread of coronavirus. The Central government has also announced a Rs 20 lakh crore economic relief package in view of the crisis.
Reserve Bank of India (RBI) Governor Shaktikanta Das while addressing the media on Friday announced that the Repo rate has been slashed by 40 basis points from 4.4 % to 4%. The Reverse repo rate has been reduced to 3.35%: and the MSFand Bank rate has been cut down to 4.25%. In his last address on April 17, the RBI governor had slashed the reverse repo rate under liquidity adjustment facility (LAF) from 4% to 3.75%. The consecutive cut in the Repo rate - the rate at which the central bank lends money to banks - takes it to its lowest point ever, in an effort to get banks to pass on the benefit to consumers and spur the investment cycle.
The RBI Governor's press brief is in regards to the central bank's own measures totalling an estimated Rs 8 crore of the Aatmanirbhar Bharat package. Das also announced that the loan moratorium will be extended till August 31.
"Three-month moratorium we allowed on term loans and working capitals with certain relaxations. In view of the extension of the lockdown and continuing disruption on account of COVID19, these measures are being further extended by another 3 months from June 1 to August 31," said the RBI Governor.
This is the second consecutive extension of the moratorium on loans which makes it a six-month moratorium since March.
(With Inputs from ANI)