RBI Governor Press Conference Highlights: RBI takes steps to safeguard Indian economy

March 27, 2020 Team Tentaran 0 Comment

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RBI Governor Press Conference Highlights – The RBI Governor’s press conference came after Finance Minister Nirmala Sitharaman announced Rs 1.07 lakh crores (1 trillion) worth of relief package for the poor on 26 March. This came after PM Narendra Modi announced a 21-day lockdown in the entire country on 24 March.

The central bank of India, RBI reduced CRR of all banks by 100 bp to 3% for 1 year, effective from March 28, 2020. It also cut benchmark interest rate by 75 bp to 4.4%. (bp here refers to basis points)

Read all RBI Governor Press Conference Highlights below:

The RBI injected Rs 3.74 trillion into the system as a result of all the announcements that were made today (27 March).

Must Read: Coronavirus economic packages India by Modi government

Depositors around the country have been requested not to panic. RBI Governor assured public that their deposits were safe.

“The fundamentals of the Indian economy are more sound than they were in the aftermath of the previous global financial crisis.” – RBI Governor Shaktikanta Das

RBI Governor Press Conference Highlights –

Regulation and Supervision

All lending institutions allowed to reassess
NSFR: Deferred to Oct 2020
Capital buffers: Implementation of last tranche of CCB deferred to 30 Sept 2020.
The RBI allowed commercial banks 3 months deferment on payment of interests.
All commercial banks have been permitted to allow 3-month moratorium on repayment of term-loan EMIs.

Array of instruments by the RBI that will strengthen the economy

Policy rate widened from 50 bp to 65 bp.
Marginal Standing Facility reduced to 2% of SLR.
Minimum daily CRR balance requirement is now reduced from 90% to 80%. One time dispensation upto June 2020.
Cash Reserve Ratio reduced down for all banks by 100 bp to 3% for 1 whole year, effective 28 March 2020 onwards.
RBI to conduct auction of repo of 3-year papers to the tune of 1 trillion at a floating rate.

Also Read: Coronavirus central government advisory in India

RBI Governor Press Conference Highlights –

Banks and other financial institutions must do all they can to keep credit flow going.
Macroeconomic risks on both demand and supple would be severe.
No specific growth and inflation expectations form the MPC due to the intensity of the pandemic.
Aggregate demand may weaken due to the ongoing pandemic and will result in easing core inflation.
Inflation is running 30 bp above RBI expectations in this quarter.
5% of India’s FY20 GDP growth forecast is at risk. If supply chain disruptions get accentuated due to the pandemic, the global slowdown could increase.
The governor said that the central bank quarantined 150 members as part of its continuity plan.
The MPC agreed to reduce policy repo rate by 75 bp to 4.4%
The Monetary Policy Committee (MPC) voted in favour of sizeable reduction in repo rate.
The RBI advanced up its meeting from 31 March – 3 April to 24 March – 27 March.
RBI Governor Shaktikanta Das addressed the media via video conferencing.