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RBI reduces repo rate by 75 basis points to 4.4%: Key points – Times of India

NEW DELHI: Reserve Bank of India (RBI) governor Shaktikanta Das on Friday announced a 75 basis points cut in repo rate to deal with the impact of deadly coronavirus outbbreak on the economy.
The announcement comes a day after Union finance minister Nirmala Sithraman unvieled a slew of measures worth Rs 1.70 lakh crore in an effort to cushion the economic blow of the 21-day lockdown in wake of the pandemic.
Here are the top updates from the RBI’s unscheduled monetary policy meet:
* Policy repo rate has been reduced by 75 basis points from 5.15 per cent to 4.4 per cent
* Reverse repo rate reduced by 90 basis points to 4 per cent
* Monetary Policy meet scheduled for March 31-April 3 was advanced to March 25-27
* Monetary policy committee voted 4:2 majority to cut repo rate by 75 basis points
* Reverse repo rate cut more so that banks are incentivised to lend: RBI governor
* Cash Reserve Ratio (CRR) of all banks have been reduced by 100 basis points to 3 per cent of net demand and time liabilities with effect from the fortnight beginning March 28 for a period of 1 year.
* All lending institutions may allow 3-month moratorium on payment of term loan installments: RBI governor
* RBI to inject liquidity worth Rs 3.74 lakh crore into the system
* Monetary policy committee refrained from giving out growth, inflation outlook for coming fiscal on uncertain outlook.
* India has locked down economic activity and financial markets are under severe stress.
* Finance is the lifeline of the economy, keeping it following is the paramount objective of the Reserve Bank of India at this point of time: Shaktikanta Das
* Moratorium on term loan, deferring of interest on working capital will not be classified as default, not to impact credit history of borrower: RBI
* Global slowdown can deepen with adverse implications for the country: Das
* Slump in crude oil prices upside for India; foodgrain prices may soften further on back of record production: RBI governor
* COVID-19 related volatility in stock market has impacted share prices of banks as well resulting in some panic withdrawal of deposits from a few private sector banks.
* It would be fallacious to link share prices to the safety of deposits. Depositors of commercial banks including private sector banks need not worry on the safety of their funds: RBI governor
* Banking system in India safe; deposits safe in private bank; public should not resort to panic withdrawal: Das
* RBI governor says all instruments — conventional and unconventional — are on table to support financial stability and revive growth.