The RBI cut the repo rate by 75 basis points to 4.4 percent from the current 5.15 percent, the RBI Governor Shaktikanta Da announced after an unscheduled Monetary Policy Committee meeting amid the ongoing 21-day coronavirus lockdown in India.
RBI governor Shaktikanta Das said that the time has come for the country's central bank to unleash an array of instruments from its arsenal to revive growth and preserve financial stability.
Das also warned that large part of world will slip into recession and this uncertain outlook has never been seen before.
Announcing the cut in the cash reserve ratio to 100 basis points, the RBI's governor said that the priority is to undertake strong and purposeful action to protect the domestic economy.
We "need for all stakeholders to fight against the pandemic and banks should do all they can to keep credit flowing," RBI Governor Shaktikanta Das said while briefing media in Mumbai.
Providing major relief to country's middle class and people who have been affected due to the pandemic, RBI stated that: "All commercial banks and NBFCs are permitted to allow a three month moratorium on payment of installments of all term loans”.
Which means commercial banks may allow the loan borrowers to skip monthly installment for the next three months.
As of Thursday, the Indian Health Ministry has confirmed 649 cases of COVID-19 since the start of the outbreak, with 13 deaths.