Modi, Nirmala, industry welcome RBI ‘bazooka’ of interest rate cut
   Date :29-Mar-2020

Modi Nirmala_1  
 
 
NEW DELHI :
 
FROM Prime Minister Narendra Modi to rating agencies and economists, all welcomed the Reserve Bank of India’s steps to reduce the cost of borrowing and infusing liquidity in the market in its war against the impact of coronavirus pandemic. Following are the comments made by key leaders, businessmen and economists: * Prime Minister Narendra Modi: Today RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce the cost of funds, help middle class and businesses.
 
* Finance Minister Nirmala Sitharaman: Appreciate RBI Governor Shaktikanta Das’ reassuring words on financial stability. The 3-month moratorium on payments of term loan installments (EMI) and interest on working capital give much-desired relief. The slashed interest rate needs quick transmission.
 
* Alka Anbarasu of Moody’s Investors Service: “RBI’s guidelines permitting banks and non-bank financial institutions to grant a 3-month moratorium on loan repayments will soften the negative credit impact that the coronavirus has had on their borrowers in the near term. However, there are still material downside risks to asset quality given the halt in India’s economy, the impact of which will not be known until a few quarters after the end of the moratorium.
 
* SBI Chairman Rajnish Kumar: The RBI policy announcements are bold, decisive, compelling and with a humane touch in attenuating to the needs of the economy to fight through the pandemic. The large rate cut, the adjustment in capital conservation buffer, the moratorium on repayments and the bazooka of conventional CRR cut and unconventional liquidity measure of incentivising banks to support CP market - all will help financial markets stabilise, lead to immediate rate transmission and address the credit needs of the real economy. Given that we are in exceptional times, RBI has played the role of championing the cause for the economy and financial system!
 
Analysts welcome RBI stimulus measures
 
MUMBAI,
 
Mar 28 (PTI)
 
ANALYSTS were unanimous in welcoming RBI’s rate cuts, forbearance on loans and liquidity easing measures, saying the economy requires stimuli in the present circumstances. Some of them also said that the Reserve Bank of India (RBI) may have to deepen the rate cut if the COVID-19 crisis prolongs. The RBI, which advanced a meeting of the rate setting panel by a week, announced a 0.75 per cent cut in its policy rates, infusion of Rs 3.76 lakh crore of liquidity through moves like a cut in cash reserve ratio and also allowed banks to not treat any term loans as NPAs for three months if there is no repayment.
 
“RBI, very correctly so, announced a comprehensive bazooka covering all aspects of the economy by taking measures system-wide both through liquidity, rates and regulatory forbearance (retail as well as for industry) and also targeted measures to manage the corporate bond markets,” Kotak Mahindra Bank’s senior economist Upasana Bharadwaj said. She said that the measures should help in tiding issues which many banks/institutions were fearing and will go a long way in cushioning the dislocations in various markets.