India infuses massive liquidity in banking, loan pay deferred

Reserve Bank Of India on Friday 26 March 2020 has infused massive liquidity into the Indian banking system for economic stimulus during Corona crisis.Highlights : • Repo rate cut by 75 basis points to 4.4%. • Reverse Repo cut by 90 basis points to 4%. • CRR cut by 100 basis points to 3% for 1 year to infuse $ 2.2 bn. • Min daily CRR balance cut from 90% to 80% till 30 June. • Rs 3.74 lakh crore liquidity injected. • 3 month moratorium on payment of loans. • Interest off for 3 month on WC facilities. • Such deferment not to be taken as NPA. • Revised DP calculations by reassessing WC cycle. • No measures to effect credit history. • Total liquidity injection 3.4% of GDP. • GDP growth for Q4 19-20 and FY 20-21 to be affected.• Aggregate demand may weaken. • Future outlook uncertain and negative.

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