Dipen Agrawal, President of Chamber of Associations of Maharashtra Industry & Trade (CAMIT) welcoming the announcements made by Shashikant Das, Governor RBI to mitigate the impact of the Coronavirus said that the steep cut in the repo & reverse repo rates by 75 and 90 basis point reduction in CRR will push banks to look at increased lending, thereby ensuring attractive lending rates. With the repo rate now, at 4.4% the banks should pass the benefits of the present & previous rate cuts to the customers.
This will reduce the borrowing cost for the home-seeker significantly and have a positive impact on real estate and will reduce cost of funds. The 3 month moratorium for borrowers is a huge relief for individuals. The payment of instalments on term loans (housing, motor, personal, plant & machinery and like). This will help people to postpone payment of EMIs and help their cash position and support cash flows of firms too. There will be similar effect from deferment of interest on working capital loans. Agrawal appealed to management of all banks to take urgent meetings to pass on the benefit to customers.
RBI governor was silent on extension of Letter of Credit and time bound commitments under FEMA, however Agrawal said that RBI governor’s statement ‘whatever steps are necessary – all instruments, conventional and unconventional are on the table’, gives a ray of hope that more steps will be taken in near future to bring our economy out from the inevitable recession.