RBI Monetary Policy August 2020 Highlights:
RBI Governor Shaktikanta Das today announced that the repo rate will remain unchanged. The RBI MPC has unanimously voted to maintain the status quo on policy rates. Shaktikanta Das added that the MPC will remain watchful with respect to inflation dynamics to further use space available on the monetary side when appropriate.The RBI Governor also announced stimulus measures, which included additional liquidity of Rs 10,000 crore at repo rate to NABARD and NHB. “RBI’s move will definitely aid the reeling sector to tide over the liquidity crisis. The enhanced finance flow should see developers in need of last-mile funding being able to complete their stalled projects,” said Niranjan Hiranandani, President – Assocham and Naredco. Among other measures, the RBI allowed stressed MSME borrowers to restructure debt if their loans were classified as ‘standard’ as on 1 March 2020. The MSME loan restructuring scheme was already in place, but, due to the coronavirus, the MSME pain has been aggravated, and this warrants additional support, Shaktikanta Das added.
In an effort to mitigate the impact of COVID-19 on households, the RBI has increased the permissible loan to value ratio (LTV) for loans sanctioned against pledge of gold ornaments and jewelry for non-agricultural purposes from 75 percent to 90 percent till 31 March 2021.
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