RBI extends loan moratorium by additional 3 months
NEW DELHI [Maha Media]: The Reserve Bank of India (RBI) said on Friday the three-month moratorium on payment of installments on term loans to banks, non-bank financial institutions (NBFCs), including housing finance companies and other financial institutions is being extended by another three months.
“In view of the extension of the lockdown and continuing disruption on account of Covid-19, these measures are being further extended by another three months from June 1 to August 31,” Das said during a press conference through video, his third such address to the media during the coronavirus pandemic. Das said the decision was taken in an unscheduled meeting of RBI’s monetary policy committee (MPC).
The announcements also came as the country entered the fifth day of the fourth phase of the nationwide lockdown to curb the spread of the virus. The RBI had allowed financial institutions a three-month moratorium on payment of installments on term loans on March 27.
The moratorium allowed by RBI will help borrowers in easing the burden on their savings and avoid turning defaulters.
The RBI on Friday unexpectedly cut its repo rate by 40 basis points for a second time this year after an off-cycle policy review to counter the economic fallout from an ongoing nationwide lockdown to contain the spread of the coronavirus disease.
RBI governor Shaktikanta Das said the short-term lending rate now stands at 4% down from 4.4% earlier. The reverse repo rate was also reduced by 40 basis points to 3.35%. Shaktikanta Das said in a video conference that the central bank’s Monetary Policy Committee (MPC) had voted to maintain its “accommodative” stance and that five out of six members in favour of a rate cut.