MPC advanced its meeting (earlier it was scheduled on 3rd April). Rate cut of 75 bps to 4.4%. Reverse repo cut by 90 bps bps at 4% – widening the corridor. MPC voted in ratio of 4:2 in favour of rate cut.
Liquidity measures for banks:
- CRR – CRR is reduced by 100 bps to 3% of NDTL for period of 1 year – Rs. 137000 crore will get released across the banking system.
- Minimum daily CRR maintenance reduced to 80% from 90% ( for period till June)
These liquidity measure will inject Rs. 374000 crore in the system
- Moratorium on term loans – all lending institutions are allowed to have moratorium of 3 months wrt to term loans
- Deferment of interest on WCL – deferment of payment for 3 months, accumulated payment will be done after this period.
- Easing of WCL all these will not lead to any changes in the lending institutions.
- NSFR – deferring implementation by 6 months.
- Deferment of CCB of last tranche 0.625% by 6 months.