scorecardresearch
Follow Us:
Wednesday, June 03, 2020

Governor Shaktikanta Das press conference highlights: RBI cuts rate, extends loan relief

RBI Governor Shaktikanta Das press conference highlights: The decision to reduce repo rate was taken to revive growth and mitigate the impact of the coronavirus pandemic.

By: Express Web Desk | New Delhi | Updated: May 22, 2020 2:38:53 pm
Reserve Bank of India (RBI) Governor Shaktikanta Das. (File photo)

RBI Governor Shaktikanta Das press conference highlights: Following a three-day off-cycle meeting, the Monetary Policy Committee (MPC) Friday slashed the repo rate by another 40 basis points from 4.4 per cent to 4 per cent. Reserve Bank of India (RBI) Governor Shaktikanta Das, addressing the press, said the unanimous decision was taken to revive growth and mitigate the impact of the coronavirus pandemic. The reverse repo rate was reduced simultaneously to 3.35 per cent.

Meanwhile, Das said the GDP growth would remain in negative territory, with some pick up in the second half. “Simultaneous fiscal, monetary and administration measures will create conditions for a gradual revival of activity in the second half of 2020-2021,” he said.

Among the policy decisions taken, the moratorium on term loans available till May 31 was extended by another three months till August 2020.

Das was addressing his third press conference in two months, since India went into lockdown to contain the spread of Covid-19. His briefing came days after Union Finance Minister Nirmala Sitharaman held a series of five press conferences to announce details of India’s Rs 20 lakh crore economic package to cushion the impact of the coronavirus pandemic.

Live Blog

Reserve Bank of India Governor Shaktikanta Das press conference highlights: Repo rate slashed by 40 basis points from 4.4% to 4%; reverse repo rate reduced to 3.35%. GDP growth to remain in negative territory. Read news in Tamil

14:29 (IST)22 May 2020
Reactions to RBI Governor Shaktikanta Das' announcements today

Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com:

With a view to supporting the economy in general and real estate in particular in the wake of Covid-19, the government has in the recent past made a series of announcements. The RBI decision to further reduce the repo rate to 4% is a major step in that direction. The move will not only help developers but also homebuyers who have been under extreme pressure due to the prolonged lockdown which has impacted their income. This along with the move of extending loan moratorium for another six months will be extremely helpful in lowering the burden for those who are paying EMIs or using credit cards and lower financial stress. What needs to be seen is how quickly the banks reflect this change in their respective rates.

Ankit Kansal, MD & CEO, 360 Realtors:

The RBI measures to reduce the repo rate & reverse repo rate is in continuation of the govt. policies to build liquidity & enhance its circulation in the system. The Real Estate welcomes the prudent step. It will help in managing supply-side bottlenecks by providing better and easier credits to the developers. Likewise it will boost demand in the form of cheaper home loans. The timing is also apt as everywhere we can see the partial suspension of the lockdown and things are gradually coming back to normal. In such circumstances, a positive step like this can give further confidence & foster faster revival.

Prateek Mittal, Executive Director, Sushma Group:

We welcome this announcement by the RBI governor to reduce the repo rate by 40 bps to from 4.4% to 4%. Holding such a prominent position in in building the country’s economy, the realty sector will garner extensive benefits and the reduced repo rate will hugely support the buyer and boost the demand . Along with that the extended term loan moratorium period will provide the relief towards liquidity for developers to focus on faster execution of projects.

Uddhav Poddar, MD, Bhumika Group:

We welcome the further reduction of policy rates by 40 basis points announced today, with this round of reduction the lending rates are like to be at the lowest in 10-15 years. The extension of loan moratorium by another 3-months will help a vast majority of people tide through this period. However, we were expecting RBI to allow a one time restructuring of loans seeing the pain across sectors, and we hope to hear some announcement in that regard soon.

Harvinder Singh Sikka, MD, Sikka Group:

This time it is likely that banks will transmit the benefits to customers quickly as RBI is likely to keep a watch on it. In the current scenario it was important to take steps that can make the economy start recovering. The latest announcements indicate that RBI is likely to ease it’s monetary policy to financial system. Banks also should take a leaf out of this and extend loans to real estate sector, which in turn will play a role in the economy growth.

Vikas Bhasin, CMD, Saya Homes:

RBI on its part is showing seriousness towards the health of economy. Now we hope that banks should pass on the benefit to the buyers in quick time. The demand for homes will increase further as home loan interest rates will come down to a historic low. It is good news for the real estate sector.

Dhiraj Jain, Director, Mahagun Group:

After the latest announcement by the RBI we expect the demand to go up. The fence sitters will have no better time to buy then the current period. People have already assessed the importance of owning a home, which was clear from the bookings during the lockdown period. The government must now step forward and give relief package to the sector so that things move smoothly.

14:22 (IST)22 May 2020
'Banks need to make quick transmission of announced rate cuts to end consumer'

Amit Modi, President-Elect CREDAI Western UP and Director ABA Corp: "RBI’s recent announcements will further provide more relief to several Indians who have been forced to sit home in the wake of the novel coronavirus outbreak, but first, all the banks need to make sure that there is a quick transmission of the announced rate cuts to the end consumer, else the whole effort will be futile. We also wholeheartedly welcome the extension of 3 month moratorium on EMIs till 31 August and this should be applicable right away to bring relief to millions of homebuyers across the nation. We feel that RBI and the Government should proactively make sure that these benefits reach the end consumer, especially now that there is a 40 basis point cut and in the cash reserve ratio to ensure sufficient liquidity in the system."

14:16 (IST)22 May 2020
'Situation for homebuyers might improve'

Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, ASSOCHAM – National Council on Real estate, Housing & Urban Development:

"Now the situation for homebuyers might improve further as home loan interest rates are expected to come down further. People, who have decided to buy a home during the lockdown period will take a quick decision if banks pass on the benefit. Steps by the RBI are aimed at easing the economy. Affordable housing will benefit the most as the buyers of this segment are very particular about the EMIs. With historically low EMIs, people will go out to buy and thus increase the demand. Now government has to come out with steps to help the developers working in this segment so that projects can be completed without any hindrance."

13:54 (IST)22 May 2020
'Govt and RBI may be using up all their ammunition a little prematurely'

Dhiraj Relli, MD & CEO, HDFC Securities on today’s announcement made by RBI: "The RBI has once again announced a repo rate cut post an unscheduled MPC meet. The RBI statement covers reliefs across a whole host of areas. The cautious language in the statement of the Governor raises concerns about the state of the economy and its path going ahead.

"The government and the RBI may be using up all their ammunition a little prematurely to fight the current situation. One wonders whether all these relief measures would have been more impactful after the lockdown was completely lifted," he said.

13:52 (IST)22 May 2020
'Combination of regulatory, monetary measures much needed steroids for economy'

Lakshmi Iyer, CIO (Debt) & Head of Products, Kotak Mahindra Asset Management Company, says: “It’s raining in summer already! That’s the reaction to a surprise rate cut by RBI today where the repo rate was reduced by 40bp to 4% and reverse repo consequently is now at 3.35% (3.75% earlier).

"There is no doubt that Covid crises and its repercussions on the economic prospects has led the RBI to announce these measures. The downward march of interest rates is likely to gain momentum with this move. The combination of regulatory and monetary measures are indeed the much needed steroids for the ailing economy. We expect easy liquidity conditions and downward rate movement to anchor bond yields and also ease cost of borrowing for the real sector,” she adds.

12:56 (IST)22 May 2020
BankBazaar.com CEO on RBI's decision to extend moratorium on loans

BankBazaar.com CEO Adhil Shetty on RBI Governor’s latest announcements on the repo rate reduction and extension of EMI moratorium: "The reduction in the key policy rate would translate to lower loan EMIs quickly, especially if you are currently servicing a repo rate-linked loan. If you have an MCLR-based loan, you might have to wait a bit longer to be able to enjoy lower EMIs on your loan."Now, with the extension of loan moratorium facility on all term loans by three months, borrowers would get a six-month EMI holiday for dues falling between March 1, 2020, to August 31, 2020. However, it will be worthwhile to re-emphasize this extension of loan EMIs is by no means a waiver on repayments as interest will continue to get accrued on the principal outstanding. So, simply put, you’ll be well-advised to take the moratorium option only if you’re finding it extremely difficult to repay your loans during these six months... Opting for the moratorium could extend your loan tenure by tens of EMIs, considerably adding to your loan burden, especially if you’ve just started repaying your loan," he adds.

12:22 (IST)22 May 2020
'Extension of the moratorium can put pressure on the RBI's balance sheet'

Deepthi Mathew, Economist at Geojit Financial Services, says: "By cutting the repo rate and reverse repo rate, RBI aims to inject more liquidity into the system. However, more importantly, what is needed is to remove the risk averseness as there is substantial liquidity in the banking sector. The rising food inflation rate could be a challenge to the RBI as it is following the inflation targeting regime. Similarly, the extension of the moratorium would bring in some relief to the borrowers, but it can put pressure on the bank's balance sheet."

12:12 (IST)22 May 2020
Impact of RBI’s decisions to slash repo rate, extend loan moratorium on corporates, consumers

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday slashed its key policy rates to stabilize the financial system and tackle the economic fallout from the ongoing nationwide lockdown to contain the spread of the coronavirus pandemic. Why did the RBI cut interest rates? What will be the impact of this? What’s the significance of extension of moratorium? George Mathew answers all your questions in this explainer

11:29 (IST)22 May 2020
'Stress in the banking sector will continue'

Responding to the RBI's announcements, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, says: "RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meet to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models. Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue"

11:18 (IST)22 May 2020
RBI's announcements a 'major booster shot'

Anuj Puri, Chairman of ANAROCK Property Consultants, says: "The RBI’s repo rate cut of 40 bps – from 4.40% to 4% now - is a welcome move. Simultaneously, for the second time in a month, the reverse repo rate has also been slashed by another 40 bps and now stands at 3.35%. This is another big step which will ease liquidity for developers - the rate cut will not only send out positive signals but will enable banks to lend even more. Thus, the rate cuts combined with the further extension of loan moratoriums by 3 months up to August 31, 2020 augurs well for the real estate sector in the times to come.

"This move is a major booster shot aiming to cushion the impact of COVID-19 on the Indian economy. Beyond doubt, repo rate cuts do uplift the sentiments of home buyers even further. Home loan interest rates have already gone down substantially over the last year, and are presently at an all-time low averaging between 7.15% to 7.8%," he said in a statement.

11:10 (IST)22 May 2020
RBI rate cut: In line with expectations, says chief economist of Anand Rathi Shares & Stock Brokers

Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers reacts to RBI announcements: "Rate cut of 40 bps is line with expectations as also extension of loan moratorium. The measure to convert the moratorium interest payment into a term loan payable in course of FY21 is the most important announcement. This can reduce NPA, at least in the next 12 month. The additional liquidity measures remain rather muted. The RBI also remains circumspect on growth and inflation outlook."

10:53 (IST)22 May 2020
Loan EMIs set to get cheaper as RBI cuts repo rate

Following a cut in RBI's key interest rates, loan EMIs are set to get cheaper particularly the home loans that are linked to the marginal cost of funds-based lending rate (MCLR) of the lending banks. 

10:32 (IST)22 May 2020
RBI is at the forefront to meet Covid-related challenges: Governor Shaktikanta Das

The RBI is at the forefront and will continue taking measures necessary to meet Covid-19 related challenges, says Governor Shaktikanta Das. "RBI will remain vigilant and use all its instruments -- and even fashion new ones -- to keep the financial system smoothly functioning, ensure access to all and to preserve financial stability." He concludes his press conference. 

10:28 (IST)22 May 2020
Moratorium on term loans extended by another three months till August: Das

RBI Governor Shaktikanta Das announces four policy decisions taken by the MPC to mitigate the impact of Covid-19. These include: measures to improve functioning of markets; investments by FPIs by voluntary retention route; support to exports and imports; extension of measures to ease financial stress

10:19 (IST)22 May 2020
India's foreign exchange reserves at $487 billion: RBI Governor

India's foreign exchange reserves have increased by 9.2 billion during 2020-21 from April 1 onwards, says RBI Governor Shaktikanta Das. Till May 15, foreign exchange reserves stand at $487 billion.

10:17 (IST)22 May 2020
GDP growth to remain in negative territory: RBI Governor Shaktikanta Das

RBI Governor Shaktikanta Das says the simultaneous fiscal, monetary and administration measures will create conditions for a gradual revival of activity in the second half of 2020-2021. He says GDP growth is estimated to remain in the negative territory, with some pick up in the second half.

10:15 (IST)22 May 2020
Industrial production shrinks by 17% in March: Das

The RBI Governor says industrial production shrank by 17 per cent in March due to India's lockdown, while manufacturing activity fell by 21 per cent. Output of core industries contracted by 6.5 pe cent, Das added.

10:14 (IST)22 May 2020
Reverse repo rate slashed to 3.35%

RBI Governor Shaktikanta Das announces a cut in the repo rate by 40 basis points (bps) to 4 per cent, while the reverse repo rate was reduced simultaneously to 3.35 per cent.

10:09 (IST)22 May 2020
MPC cuts repo rate by 40 basis points to 4%: Shaktikanta Das

RBI Governor Shaktikanta Das begins his address to the press. He says Covid-19 has crippled the global economy and has brought forward the need for an off-cycle meeting of the Monetary Policy Committee (MPC). Over the last three days (May 20-22), the MPC has voted unanimously in a reduction of policy repo rate to revive growth and mitigate impact of Covid-19. The repo rate has been cut by 40 basis points from 4.4% to 4%, says Das. 

09:54 (IST)22 May 2020
RBI Governor Shaktikanta Das' third press conference in two months

This is RBI Governor Shaktikanta Das' third press conference since India went into lockdown due to the coronavirus pandemic. In his last two briefings – March 27 and April 17 – Das announced a string of measures to ease liquidity in the banking and financial sectors. This included steps to expand liquidity in the market, reinforce monetary transmission, ease financial stress by relaxing repaying pressures and improve the functioning of markets in view of high volatility.

economic package, 20-lakh crore package, nirmala sitharaman press conference, nirmala sitharaman press conference live, nirmala sitharaman press conference live updates, nirmala sitharaman press conference updates, nirmala sitharaman press conference today, nirmala sitharaman press meet today, finance minister, finance minister speech, finance minister latest news Union Finance Minister Nirmala Sitharaman addresses the media in New Delhi. (Express Photo: Prem Nath Pandey)

Union Minister Nirmala Sitharaman announced five tranches of measures last week to help India gain self-reliance. The Atmanirbhar Bharat Abhiyan, announced first by Prime Minister Narendra Modi in an address to the nation amid the coronavirus pandemic, was to help the country compete at a global level and become self sustainable.

The Rs 20 lakh crore economic package, which is 10 per cent of GDP in FY20, included measures taken by the government and the Reserve Bank of India. At least Rs 9.74 lakh crore worth measures had been announced before Sitharaman unveiled details of the package. The remaining was largely liquidity driven, with little burden on the exchequer.

A large part of the Centre’s fiscal relief – Rs 40,000 crore or 0.2 per cent of GDP – was additional allocation to MGNREGA over and above the Budget Estimate of Rs 61,500 crore.

In the two press conference held by RBI Governor Shaktikanta Das, on April 17 and March 27, measures to boost liquidity in the system were announced. On Marc 27, Das announced a Rs 3.74 lakh crore (1.8% of GDP) package, which included Targeted Long-Term Repo Operations (TLTRO) worth Rs 1,00,000 crore; Cash Reserve Ratio (CRR) was cut by 100 basis points to 3 per cent; and accommodation under Marginal Standing Facility was hiked from 2% of Statutory Liquidity Ration to 3%: Rs 1,37,000 crore.

On April 17, the central bank announced Targeted Long-Term Repo Operations of Rs 50,000 crore and refinance of Sidbi, Nabard and NHB.