Mumbai, Mar 27: The Reserve Bank of India (RBI) on Friday lowered the key repo rate by 75 basis points to 4.4 per cent in a bid to arrest the economic slowdown amid coronavirus (COVID-19) outbreak.
The reverse repo rate now stands at 4 per cent, down by 90 basis points, said RBI Governor Shaktikanta Das adding this has been done to make it unattractive for banks to passively deposit funds with the central bank and instead lend it to the productive sectors.
The six-member monetary policy committee (MPC) met on March 24, 25 and 27 and voted 4:2 in favour of the repo rate reduction. The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target.
"The need of the hour is to shield the economy from the pandemic," said Das. "We need to mitigate the impact of coronavirus, revive economic growth and provide financial stability."
Repo rate is the rate at which a country's central bank lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.
The RBI Governor further said that the economic growth and inflation projection will be highly contingent depending on the duration, spread and intensity of the pandemic.
"Global economic activity has come to a near standstill as COVID-19 related lockdowns and social distancing are imposed across a widening swathe of affected countries. Expectations of a shallow recovery in 2020 from 2019's decade low in global growth have been dashed," said Das.
"The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic. There is a rising probability that large parts of the global economy will slip into recession," he said.
However, the RBI has injected liquidity of Rs 2.8 lakh crore via various instruments equal to 1.4 per cent of GDP. "Along with today's measures, liquidity measures equal to 3.2 per cent of GDP. The RBI will take continuous measures to ensure liquidity in the system."
The RBI governor has said that all banking institutions can offer a three-month moratorium on all loans for a period of three months. The RBI has also allowed banks to restructure the working capital cycle for companies without worrying that these will have to be classified as a non-performing asset (NPA).
The three-month moratorium will permit banks to avoid a large onset of NPAs during the 21-day lockdown and keep their books healthy.
Das said banks and other financial institutions should do all they can to keep credit flowing to economic agents facing financial stress on account of the isolation that the virus has imposed.
"Market participants should work with regulators like the RBI and the Securities and Exchange Board of India (SEBI) to ensure the orderly functioning of markets in their role of price discovery and financial intermediation," he said.
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RBI reduces repo rate by 75 basis points to battle COVID-19 impact
News Network
March 27, 2020
Yes Bank depositors' money safe; RBI working on early resolution, says finance minister
News Network
March 6,2020
New Delhi, Mar 6: As panicky depositors rushed to withdraw money from Yes Bank whose control was seized by the RBI in a dramatic late-night move, Finance Minister Nirmala Sitharaman on Friday assured depositors that their money is safe and said the central bank was working for an early resolution of the crisis.
The Reserve Bank of India (RBI) on Thursday evening capped withdrawals at Rs 50,000 for the next one month and imposed strict limits on operations at the country's fourth-largest private lender that faced "regular outflow of liquidity" after an effort to raise new capital failed.
"I am in continuous interaction with the RBI. The RBI is fully seized of the matter and has assured they will give a quick resolution," Sitharaman said here.
She said no depositor will lose his or her money and insisted that the immediate priority is to ensure Yes Bank customers are able to withdraw money within the stipulated cap.
"I want to assure every depositor that their money shall be safe. Their monies are safe," she said. "I am constantly in contact with the RBI and the steps that are taken are taken in the interest of depositors, banks and economy. We are fully seized of the development."
She was talking to reporters after meeting State Bank of India (SBI) Chairman Rajnish Kumar. On Thursday, the SBI board gave its "in-principle" approval to exploring investment opportunities in Yes Bank.
"So I repeat, the depositors can be assured that their money is safe," she said.
Soon after the RBI takeover, depositors thronged Yes Bank ATMs to withdraw money and police had to be deployed in some places to control the crowds.
Yes Bank has 1,000 branches across the country.
Refusing to elaborate on her meeting with the SBI chairman, the minister said that "was on a completely different matter".
"RBI governor has given me assurance that there will be an appropriate resolution soon. No depositor will lose (money)," she said. "Reserve Bank has taken cognizance of the problem."
The central bank, she said, has gone through the "process over and over again to find out an amicable solution".
"And that has been over the last couple of months. So it is not as if they have come in suddenly now. We have been monitoring the situation," she said adding the RBI has appointed an administrator who previously was with the SBI.
"Both the RBI and the government are looking at this with all the details before them, not just today. I have personally monitored the situation over the last couple of months with the RBI. Therefore we have taken a course which will be in everybody's interest," she added.
Yes Bank had been seeking new capital since last year to bolster its ratios and quell questions about its stability due to its exposure to the non-banking finance industry entangled in a prolonged crunch in the local credit market.
The SBI chairman said the resolution to the Yes Bank crisis will come "very shortly".
"This is not a sectoral problem. It is a bank-specific problem," he said. "The RBI will take all steps to ensure financial stability."
On SBI picking up a stake in Yes Bank, he said the lender already has an in-principle approval for doing so.
"If SBI has to pick up a stake in Yes Bank, we have an in-principle approval for that," he said.
Commenting on the crisis at Yes Bank, Alka Anbarasu, Vice President – Senior Credit Officer, Financial Institutions, Moody's Investors Service, said: "RBI's moratorium on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors."
"While Moody's expects Indian authorities will take steps to prevent the weakness in the bank's viability from significantly impacting its depositors and senior creditors, the lack of a coordinated and timely action highlights continued uncertainty around bank resolutions in India," she said.
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Section 144 clamped in Mumbai to check rising Covid-19 cases
News Network
July 1,2020
Mumbai, Jul 1: Mumbai police on Wednesday imposed section 144 of CrPC prohibiting the movement of people in public places and gatherings, to prevent the spread of Covid-19, an official said.
The prohibitory order, issued by a senior police official, says restrictions on the movement of residents for non- essential work will remain in force till July 15.
The order prohibits "presence or movement of one or more persons in public places or gathering of any sort", the official said.
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Kamal Rani, minister in Yogi Adityanath led UP cabinet, dies of covid-19
Agencies
August 2,2020
Lucknow, Aug 2: Uttar Pradesh's cabinet minister for Technical Education Kamal Rani Varun succumbed to COVID-19 on Sunday at the Sanjay Gandhi Postgraduate Institute of Medical Sciences.
Kamal Rani is the first minister in Uttar Pradesh to die after contracting coronavirus. She was 62.
On 18 July, the minister tested positive for coronavirus and was admitted to the Shyama Prasad Mukherjee Hospital.
She was later shifted to the Sanjay Gandhi Postgraduate Institute of Medical Sciences.
Uttar Pradesh chief minister Yogi Adityanath has expressed grief over the minister's death.
In a condolence message issued on Sunday, Adityanath said, "Kamal Rani Varun died on Sunday at around 9.30 am. She was an experienced and capable leader. She discharged her responsibilities with competence. She was a dedicated public representative, who was always working for the welfare of deprived and oppressed sections of the society."
Kamal Rani was the MLA from Ghatampur in Kanpur. She was also twice a Member of Parliament in the Lok Sabha.
Meanwhile, Adityanath has cancelled his visit to Ayodhya scheduled for the day, Additional Chief Secretary (Home) Awanish Awasthi said on Sunday.
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