The repo rate was again reduced in the lockdown, giving EMI an additional 3-month waiver

New delhi date. May 22, 2020, Friday

In view of the Koro crisis, the Modi government had announced an economic package of about Rs 20 lakh crore. Finance Minister Nirmala Sitharaman has given detailed information about this package to the country. Now, Reserve Bank of India Governor Shaktikant Das has announced a reduction in the repo rate. In addition, an additional 3 months is allowed to pay the loan installments. This means that the bank will not push you if you cannot repay the EMI of your loan for the next 3 months.

The RBI governor said the MPC had reviewed the domestic and global situation in the last three days. It has since been decided to reduce the repo rate by 0.40 per cent. This is the second time in the lockdown that the RBI has cut the repo rate. Earlier on March 27, the RBI governor had decided to reduce it by 0.75 per cent. Banks then cut interest rates on loans.

Three months extra discount on EMI

The RBI held a press conference in the early days of the lockdown and asked banks to give concessions on loans and EMIs for 3 months. Since then most banks had applied for a 3-month waiver. The customer will now be able to get a total of 6 months off after the RBI announces a new 3-month relief. This means that the bank will not be able to pressure you if you cannot pay the EMI of the loan for another 3 months.

Highlights of the RBI Governor

- India's GDP growth in the first six months will be negative in 2020-21. However, the second six months of the year may see a surge in growth.

- No change in reverse repo rate.

- Economic activity declined due to the lockdown, with six large industrial states mostly in the red zone.

- Production of capital goods declined by 36 per cent in March

- Consumer durables production fell 33 percent

- 21 per cent decline in manufacturing, 6.5 per cent decline in output of core industries.

- Kharif sowing has increased by 44%.

- Food inflation rose again to 8.6 per cent in April.

- Inflation will rise in the next six months, but will return to normal in the next six months.

India's foreign exchange reserves have increased by 9. 9.2 billion in 2020-21. India's foreign exchange reserves currently stand at 487 billion.

- A credit line of Rs 15,000 crore will be given to Exim Bank.

- SIDBI was allowed to use the amount given for the next 90 days.

On April 17, the Reserve Bank of India announced some relief in view of the Koro crisis and the lockdown. The reverse repo rate has been reduced by 25 basis points. Now the reverse repo rate has come down from 4 per cent to 3.75 per cent.