Home >  செய்திகள் >  After FM, RBI Guv gets...

After FM, RBI Guv gets into action, R3 fans to face meltdown

Mr. Shaktikanta Das announced a series of monetary policy measures to help Indian economy tide through the crisis due to the Chinese corona virus

By - Kathir Webdesk
Update: 2020-03-27 06:42 GMT

A day after Finance Minister Nirmala Sitharaman came out with an economic package to save the poor and vulnerable from the impact of the Chinese virus, the RBI Governor has now come to rescue India economy from the impending crisis that will cushion Indian businesses and industries from the negative impact of the Wuhan virus on the economy.

Addressing a press conference, RBI Governor Shaktikanta Das on Friday (27th March) announced a series of monetary policy actions to be taken in light of the situation arising out of the Chinese corona virus. Following are the announcements made by the RBI Governor.

• Repo rate cut has been cut by 75 basis points to 4.4% and the Reverse Repo Rate has been reduced by 90 basis points to 4%

• The Marginal Standing Facility Rate and the Bank Rate stands reduced to 4.65% from 5.4%

• Cash Reserve Ration has been reduced by 100 basis points to 3%

• The liquidity measures taken are expected to collectively inject ₹3.74 lakh crore money into the system

• A 3 month moratorium on payment of instalments of loans (EMI) outstanding on March 1, 2020 has been announced. This comes a big relief to borrowers

• All banks, cooperative banks and lending institutions are permitted to allow a 3 month moratorium on all loans

• Lending companies, banks have been permitted to defer interest on working capital repayments by three months

• Banks have also been allowed to reassess working capital cycle and outstanding loans will not be treated as non-performing assets

The Monetary Policy Committee headed by the RBI Governor has emphasised that it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while simultaneously ensuring that the inflation remains within the target of 4-6%.

He said that the earlier announced growth rate of 4.7% for Q4 of 2019-20 is at risk. He mentioned that most of the sectors of the economy apart from agriculture and allied sector would be adversely affected due to COVID-19 depending on the intensity, spread and duration of the pandemic.

The RBI Governor has said that it is of utmost priority to undertake strong and purposeful action to protect the domestic economy. He stressed on the need for all stakeholders to fight against the pandemic collectively and asked the banks to keep the credit flowing.

Mr. Shaktikanta Das also said that the macroeconomic fundamentals of the Indian economy are sound and in fact stronger than what they were in the aftermath of the global financial crisis of 2008-09.

He appealed to all people especially those with deposits in private banks to not resort to panic withdrawal. He said "COVID-19 is upon us but this too shall pass". He urged people to "stay safe, stay clean and go digital".

This accommodative monetary policy is set to upset Raghuram Rajan fans. It is to be remembered that Raghuram Rajan, the previous RBI Governor resorted to a policy of inflation targeting at a time when there was a huge demand for credit from micro, small and medium scale industries. Although Mr. Rajan is to be credited for bringing the inflation down which was hovering in double digits, he did not slash the repo rates correspondingly. Mr. Rajan kept the repo rate as high as 6.5% during his tenure that kept the cost of capital high for small and medium scale industries. This starved the MSME sector which led to a slow growth in GDP. However, since he became a darling of the western and Lutyens media, his failures were never highlighted. He was seldom criticized for his wrong policy of inflation targeting that pushed the MSME sector to the verge of collapse. In fact, it was the Modi government that received flak for sending off Raghuram Rajan while it was Raghuram Rajan himself who chose to pursue his academic interests in the United States where he holds a Green Card.

The corona virus has come as blessing in disguise for Indian industries. With more money in the system, things are bound to get better in the subsequent quarters if not in the next two quarters. The 3 month moratorium is certainly going to put a smile on the Indian middle class and business in these tough times. With an expansionary fiscal policy and an accommodative monetary policy, India shall and will come out of the befallen crisis! 

(With Inputs from Press Information Bureau)

Similar News

அதிகாரிகள் அரசு சொத்துகளை பாதுகாக்க அக்கறை காட்ட வேண்டும் என உயர் நீதிமன்றம் உத்தரவு!!

நகராட்சி நிர்வாகத்துறையில் பணி நியமன முறைகேடு! அமைச்சர் கே.என் நேரு மீது வழக்குப் பதிவு செய்ய உத்தரவு!

திருப்பரங்குன்றம் தீபத்தூண் விவகாரம்!! நீதிமன்ற அவமதிப்பு மனு முடிக்க உத்தரவு!!

விஜய்-சங்கீதா விவாகரத்து!! அண்ணாமலை கருத்து!!

மின் மாற்றிகள் கொள்முதல் முறைகேடு!! லஞ்ச ஒழிப்புத் துறைக்கு உயர் நீதிமன்றம் உத்தரவு!!

பூங்குடி தொடக்கப் பள்ளி!! கழிவறை இல்லாமல் மாணவர்கள் அவதி!!

பொது சிவில் சட்டம்!! ஆர்எஸ்எஸ் தலைவர் மோகன் பாகவத் கருத்து!!

கோயில் திருவிழாக்களில் சிறு வியாபாரிகளுக்கு அனுமதி!! சென்னை உயர் நீதிமன்றம் உத்தரவு!!

பிரதமரின் மனதின் குரல் நிகழ்ச்சி! உறுப்பு தானம், ஏஐ உச்சி மாநாடு மற்றும் மாணவர்களுக்கு வாழ்த்துகள்!!

மார்ச் 1-ல் மதுரையில் பிரதமர் மோடி! எய்ம்ஸ் மருத்துவமனை திறப்பு மற்றும் தேஜ கூட்டணி பொதுக்கூட்டம்!!

மாற்றுத்திறனாளிகள் போராட்டம்!! காவல்துறை நடவடிக்கை கண்டனம்!!

இந்தியாவில் இஸ்லாமிய மக்கள் பாதுகாப்பாக உள்ளதாக மதத்தலைவர் உறுதி!!