Loan waiver scheme extended by 3 months by RBI, know more details

RBI decision / loan waiver scheme extended by 3 months, reduced repo rate by 0.40% to make loan cheaper. According to RBI Governor Das, in February, we said that global growth will decline due to Corona. Since then we have taken several decisions on the liquidity front.

  • Focus on distributing loans to Mid-Class, know who benefits of RBI announcemenT
  • RBI gave advice to customers for relief

Loan waiver scheme extended by 3 months

Additional 3 months rebate has been given on the loan installment. In fact, RBI held a press conference in the early days of lockdown and asked banks to give a discount on loans and EMIs for 3 months. After this, most banks implemented it for 3 months.

Now after the new announcement by RBI, customers will get a total of 6 months of rebate. This means that if you do not want to give loan EMI for a total of 6 months, then there will be no pressure from banks. At the same time, your credit score will also be correct. That is, you will not be a defaulter in the eyes of the bank. However, you will have to pay additional interest for this.

Reserve Bank of India (RBI) Governor Shaktikanta Das has announced a cut in the repo rate. Along with this, an additional discount of 3 months has been given on the loan installment.

Keeping in mind the impact of the lockdown on the common man and traders, the Reserve Bank of India (RBI) made important announcements today. RBI Governor Shaktikanta Das said in a press conference that the 3-month exemption given in March to repay the loan installment is being extended for the next 3 months. The main interest rate repo rate has been reduced by 0.40% to make loans cheaper, so that loans are more cheap.

Consider the decisions of RBI as follows:

  • Those who have taken loans, they were given exemption in EMI payment
  • Now it has been extended for 3 months. That is, banks have been prevented from recovering loan EMIs till August. Customers can pay if they want to themselves, banks will not put pressure.

Meaning: For the  next 3 months the installment will not be deducted from the account of any person who has taken a loan. If you do not pay the August installment, it will not be considered a default However, this does not mean that the arrears will never be paid, but will have to be paid later. It is meant to provide relief to those who have lost cash due to the lockdown.

2. Repo rate reduced to make debt cheaper
Repo rate was earlier 4.40%, now 0.40% has been reduced to 4. Repo rate is the rate at which banks get loan from RBI. If banks get cheaper loans, they will reduce the rate for customers.

3. Banks disbursed more debt, hence reduced the reverse repo rate, reducing
this rate from 3.75% to 3.35%. The reverse repo rate means that banks get the interest they keep from keeping their money with the RBI. With the reduction in this rate, banks will distribute more loans instead of keeping more money with RBI, this will increase cash in the market.

PMI at 11-year low: Das

  • Coronavirus has damaged the world economy. Global manufacturing PMI declined to an 11-year low in April. According to the WTO, business in the world may decline by 13–32% this year. 
  • The economic activity in the country has been badly affected by the two-month lockdown. Most of the top 6 states in the industry are in the Red and Orange zones. The industry in these states accounts for 60% of the contribution to economic activity.
  • Given the impact of Corona, GDP growth is expected to be negative in the first half of 2020-21. There may be some momentum in the second half.
  • The RBI is constantly monitoring the situation. Our team has an eye on all segments of the economy. In February, we said that global growth would decline due to Corona. Since then RBI has taken several decisions on the liquidity front.

Third press conference in last two months

This is the third press conference by RBI Governor Shaktikanta Das in the last two months to deal with measures related to coronavirus. The first press conference was held by the RBI governor on 27 March and the second press conference on 17 April. In both these press conferences, the Governor announced several measures to accelerate the economy and increase liquidity in the banking system.

The government has announced an incentive package of about 21 lakh crores.
To tackle the Corona disaster, the central government has announced a self-sufficient India incentive package of about 21 lakh crores. Several measures have been taken for the farmers including cash and cash to poor laborers, credit guarantee of Rs 3 lakh crore to MSME, credit guarantee to NBFC-MFI, additional allocation for MNREGA laborers. This stimulus package is equivalent to around 10.5 per cent of India’s GDP.

Revenue greatly affected

Shaktikanta Das said that the government’s revenue has been greatly affected due to the impact of economic activities during the epidemic. However, India’s foreign exchange reserves increased by $ 9.2 billion in 2020-21. India’s foreign exchange reserves currently stand at $ 487 billion. This is good news for the treasury.