{"id":8390,"date":"2023-08-28T13:21:18","date_gmt":"2023-08-28T13:21:18","guid":{"rendered":"\/blog\/?p=8390"},"modified":"2024-09-09T14:18:22","modified_gmt":"2024-09-09T08:48:22","slug":"rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/","title":{"rendered":"RBI Press Conference on Monetary Relief Measures in the Time of COVID-19: Key Takeaways"},"content":{"rendered":"\n

The COVID-19 pandemic has caused wide-spread\ndisruption throughout the world. In addition to causing health-related\ndistress, the pandemic has also had a significantly adverse impact on the\nglobal financial and economic environment. Quick on the heels of India\u2019s\nFinance Minister Nirmala Sitharaman\u2019s relief package announcement, the Reserve\nBank of India also stepped in to declare a slew of financial relaxations to tackle the\nsituation.<\/p>\n\n\n\n

In a press conference made today, the RBI\nGovernor Shaktikanta Das came out with several measures to stem the distress on\nthe country\u2019s economy. Here are the most important takeaways and highlights\nfrom the RBI announcement.   <\/p>\n\n\n\n

Moratorium on EMI <\/strong>payments<\/strong><\/p>\n\n\n\n

The Reserve Bank of India has given\npermission to all lending institutions such as NBFCs, financial institutions,\nand banks, both commercial and co-operative, to allow a 3-month moratorium on EMI\npayments on all term loans outstanding as on March 1, 2020. This measure would\nundoubtedly ease the amount of financial stress piling up on the common public\ndue to wide-spread lockdowns and restrictions.<\/p>\n\n\n\n

However, according to the RBI announcement, it has merely given the go-ahead to lending institutions to allow a moratorium on EMIs. The onus is now on these institutions to follow through and declare a temporary deferment of term loan EMI collections. If you\u2019re currently servicing any term loans, contact your lending institution to get a confirmation on the implementation of this moratorium.<\/p>\n\n\n\n

Deferment\nof interest on working capital<\/strong><\/p>\n\n\n\n

The measures for financial relaxations were also extended by\nthe RBI to cover corporates, MSMEs, and other legal entities currently\nservicing working capital facilities. As per the RBI announcement, all the lending institutions in\nIndia are being allowed to grant a temporary suspension on the payment of\ninterest on working capital facilities outstanding as on March 1, 2020.<\/p>\n\n\n\n

Similar to the RBI’s moratorium on EMI<\/a> payments, this deferment on the payment of interest on working capital facilities would also be valid for 3 months. Additionally, this deferment would be applicable on all kinds of working capital sanctioned, including both cash credit and overdraft facilities. The interest payable on such facilities would still continue to accumulate and shall be payable only after the deferment period expires. Here too, the onus of declaration of interest deferment rests on the lending institutions.<\/p>\n\n\n\n

Easing\nof working capital financing<\/strong><\/p>\n\n\n\n

This is another major measure taken by the\nRBI as part of providing financial\nrelaxations to companies, MSMEs, and other legal entities. According to\nthe RBI announcement,\nlending institutions are free to recalculate the working capital cycle of all\nborrowers who have availed working capital by way of cash credit or overdraft\nfacilities. Additionally, the institutions are also permitted to reassess the\ndrawing power of the borrowers by reducing margins.<\/p>\n\n\n\n

The Reserve Bank of India has assured the\nlending institutions that any of the above-mentioned changes in the terms of working\ncapital credit would not result in a downgrade in asset classification. This\neffectively means that these concessions would not convert the assets of the\nlending institutions into non-performing assets (NPAs).<\/p>\n\n\n\n

The RBI announcement has also further clarified that\nthe temporary suspension of payment of term loan EMIs, interest on working\ncapital, and any other changes in the working capital facilities would not be\nclassified as a default by Credit Information Companies (CICs). Also, the CICs\nhave been instructed to make sure that the credit history of the relevant\nparties is in no way adversely impacted by these announcements.<\/p>\n\n\n\n

Other\nkey financial relaxations\nand measures<\/strong><\/p>\n\n\n\n

In addition to these three important\nrelaxations, the RBI has also announced several other measures to help combat\nthe slump in the economy. Briefly listed below are some such measures.<\/p>\n\n\n\n

    \n
  1. To\n kick start growth, the RBI decided to maintain an accommodative stance\n with the monetary policy.<\/li>\n\n\n\n
  2. The\n repo rate was significantly reduced by 75 basis points, with the current\n repo rate standing at 4.4% after the cut.<\/li>\n\n\n\n
  3. The\n reverse repo rate was also cut by 90 basis points, bringing it down to\n just 4%.<\/li>\n\n\n\n
  4. Introduction\n of several liquidity-boosting measures such as auctioning of targeted term\n repos worth Rs. 1 lakh crore and reduction in the Cash Reserve Ratio (CRR)\n of banks by 100 basis points to 3%.<\/li>\n\n\n\n
  5. The\n RBI has also made a reduction in the minimum daily CRR requirement to 80% from\n the existing 90% and increased the Marginal Standing Facility (MSF) limit\n to 3% from 2%.<\/li>\n\n\n\n
  6. The\n implementation of Net Stable Funding Ratio (NSFR), which was supposed to\n go live from April 1, 2020, has been deferred by six months to October 1,\n 2020.<\/li>\n\n\n\n
  7. The\n implementation of the last tranche of Capital Conservation Buffer (CCB) of\n 0.625% was also deferred to September 30, 2020.<\/li>\n\n\n\n
  8. Banks\n that operate under the International Financial Services Centre (IFSC)\n Banking Units are now permitted to deal in Offshore Non-Deliverable Rupee\n Derivative Markets.  <\/li>\n<\/ol>\n\n\n\n

    Conclusion   <\/strong> <\/p>\n\n\n\n

    Given the current scenario, these measures appear to be the need of the hour. However, it remains to be seen whether they alone will be sufficient or whether they will need to be supplemented with more fiscal relief measures, depending on how the course of the global pandemic plays out in the Indian context. <\/p>\n\n\n\n

    To know in detail about the RBI’s Moratorium, click on the know more button below.<\/p>\n\n\n\n

    Know More<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

    The COVID-19 pandemic has caused wide-spread disruption throughout the world. <\/p>\n

    Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":8391,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[48,39],"tags":[],"class_list":["post-8390","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government-updates","category-rbi-regulations"],"yoast_head":"\nRBI Press Conference on monetary relief measures in the time of COVID-19: Key takeaways<\/title>\n<meta name=\"description\" content=\"In the wake of the global pandemic that threatens to impact the country\u2019s economy adversely, the RBI has announced several measures to provide financial relief.\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RBI Press Conference on monetary relief measures in the time of COVID-19: Key takeaways\" \/>\n<meta property=\"og:description\" content=\"In the wake of the global pandemic that threatens to impact the country\u2019s economy adversely, the RBI has announced several measures to provide financial relief.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-28T13:21:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-09-09T08:48:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/03\/time-of-covid-19.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Tata Capital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tata Capital\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/\",\"name\":\"RBI Press Conference on monetary relief measures in the time of COVID-19: Key takeaways\",\"isPartOf\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\"},\"datePublished\":\"2023-08-28T13:21:18+00:00\",\"dateModified\":\"2024-09-09T08:48:22+00:00\",\"author\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a\"},\"description\":\"In the wake of the global pandemic that threatens to impact the country\u2019s economy adversely, the RBI has announced several measures to provide financial relief.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.tatacapital.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"RBI Press Conference on Monetary Relief Measures in the Time of COVID-19: Key Takeaways\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/\",\"name\":\"TATA Capital Blog\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a\",\"name\":\"Tata Capital\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g\",\"caption\":\"Tata Capital\"},\"sameAs\":[\"https:\/\/tata-blog.osian.dev\/blog\"],\"url\":\"https:\/\/tata-blog.osian.dev\/blog\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"RBI Press Conference on monetary relief measures in the time of COVID-19: Key takeaways","description":"In the wake of the global pandemic that threatens to impact the country\u2019s economy adversely, the RBI has announced several measures to provide financial relief.","robots":{"index":"noindex","follow":"nofollow"},"og_locale":"en_US","og_type":"article","og_title":"RBI Press Conference on monetary relief measures in the time of COVID-19: Key takeaways","og_description":"In the wake of the global pandemic that threatens to impact the country\u2019s economy adversely, the RBI has announced several measures to provide financial relief.","og_url":"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/","og_site_name":"TATA Capital Blog","article_published_time":"2023-08-28T13:21:18+00:00","article_modified_time":"2024-09-09T08:48:22+00:00","og_image":[{"width":770,"height":400,"url":"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/03\/time-of-covid-19.jpg","type":"image\/jpeg"}],"author":"Tata Capital","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Tata Capital","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/","url":"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/","name":"RBI Press Conference on monetary relief measures in the time of COVID-19: Key takeaways","isPartOf":{"@id":"https:\/\/www.tatacapital.com\/blog\/#website"},"datePublished":"2023-08-28T13:21:18+00:00","dateModified":"2024-09-09T08:48:22+00:00","author":{"@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a"},"description":"In the wake of the global pandemic that threatens to impact the country\u2019s economy adversely, the RBI has announced several measures to provide financial relief.","breadcrumb":{"@id":"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.tatacapital.com\/blog\/rbi-regulations\/rbi-press-conference-on-monetary-relief-measures-in-the-time-of-covid-19-key-takeaways\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.tatacapital.com\/blog\/"},{"@type":"ListItem","position":2,"name":"RBI Press Conference on Monetary Relief Measures in the Time of COVID-19: Key Takeaways"}]},{"@type":"WebSite","@id":"https:\/\/www.tatacapital.com\/blog\/#website","url":"https:\/\/www.tatacapital.com\/blog\/","name":"TATA Capital Blog","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a","name":"Tata Capital","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g","caption":"Tata Capital"},"sameAs":["https:\/\/tata-blog.osian.dev\/blog"],"url":"https:\/\/tata-blog.osian.dev\/blog\/author\/admin\/"}]}},"featured_image_url":"https:\/\/tata-blog.osian.dev\/blog\/wp-content\/uploads\/2020\/03\/time-of-covid-19.jpg","_links":{"self":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts\/8390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/comments?post=8390"}],"version-history":[{"count":5,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts\/8390\/revisions"}],"predecessor-version":[{"id":44491,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts\/8390\/revisions\/44491"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/media\/8391"}],"wp:attachment":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/media?parent=8390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/categories?post=8390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/tags?post=8390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}