NEW DELHI: RBI’s Monetary Policy Committee has cut the repo rate by 40 basis points to 4%, Governor Shaktikanta Das announced on Friday.
The MPC voted 5:1 in favour of rate cut. Repo rate is the rate at which banks borrow from the RBI. RBI last reduced the repo rate by 75 bps in late March as the lockdown started.
Reserve Bank of India Governor Shaktikanta Das has said that GDP growth in 2020-21 is expected to remain in the negative category.
“Government revenues have been impacted severely due to slowdown in economic activity amid COVID-19 outbreak,” Das added.
“We are trying to be proactive…Impact of coronavirus turning out to be more than expected,” RBI Governor further said.
In addition, Shaktikanta Das announced that banks will be able to provide a moratorium on EMIs and term loan payments to customers for another 3 months from June 1 to August 31.
RBI on March 27 allowed financial institutions to offer a moratorium of three months on payment of instalments of all term loans outstanding as on March 1.