Industry gives thumbs up to RBI’s repo rate reduction and other announcements

17 April, 2020 | newsx bureau

Coronavirus, RBI’s repo rate reduction, Reserve Bank of India, Shashikant Das, Finance Minister Nirmala Sitharaman National

Keeping in mind India's deteriorating economy due to coronavirus outbreak, the Reserve Bank of India (RBI) governor Shashikat Das today announced a few measure that may help rupee to strengthen a bit.

RBI Governor Shaktikanta Das on Friday announced a reduction in reverse repo rate by 25 basis points, it now stands reduced from 4 per cent to 3.75 per cent. Das emphasized that his mission is to minimize the epidemiological damage in the country due to coronavirus and announced a slew of measures in this regard today.

Reacting on RBI’s announcement, Dr. Rashmi Saluja, Executive Chairperson- Religare Enterprises Limited said, Today’s announcements by the RBI are a welcome move and will go a long way in mitigating some of the working capital and cash flow issues of the NBFC sector. The announcement regarding the TLTRO (auction) of 50,000 crores prioritizing the NBFC sector is especially heartening. This, coupled with the 50,000 crore refinancing window provided to SIDBI and NABARD will help keep the NBFC sector alive and
floating. The exclusion of the moratorium period in evaluating NPA’s/asset classification will also help the NBFC immensely. Overall, the 25 BPS in the reverse repo rate and the other liquidity injection measures are a much needed positive move. We thank the RBI and the
Government of India for these prompt steps.

While Anuj Puri, Chairman, ANAROCK also sounded confident about RBI’s measures, he said, “the RBI today announced several additional measures to accelerate the economy and
facilitate bank credit flows in Lockdown 2.0. Among the various measures announced, commendably its allotment of INR 10,000 crore to National Housing Bank is a big move for the real estate sector reeling under the liquidity crisis. It will help provide capital to HFCs and
eventually provide major relief to developers battling liquidity issues in COVID-19 times.

Puri further said that the rate cut will definitely send out positive signals in the current times, and will enable banks to lend even more. Also, in another major relief to developers, the RBI has further extended the date of commencement of commercial operations (DCCO) of
project loans for commercial real estate projects which are delayed or reasons beyond the control of promoters. This is indeed a big move and will bring much-needed relief to cash-starved developers. It will help in easing out time for maintaining and managing cash flows for these developers.