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
Guj lockdown: Over 400 detained for violations, says DGP
News Network
March 24,2020
Ahmedabad, Mar 24: The Gujarat police has detained 426 people in the last 24 hours for violating lockdown rules in force in the state to combat the novel coronavirus outbreak, a senior official said on Tuesday.
They include those who came out despite being advised home quarantine, state Director General of Police Shivanand Jha said.
"The lockdown met with around 90 per cent success. We are taking strict measures to implement the lockdown in the remaining 10-15 per cent areas. We have lodged 238 cases related to the violation of police notification and 127 cases related to quarantine rule violation. In all, we have detained 426 persons across the state," Jha told reporters in Gandhinagar.
"For better implementation of the lockdown and to address issues concerning people, we have set up a dedicated 24-hour control room and appointed two additional DGP rank officers to supervise operations. Three teams under them would work to resolve issues across the state," said Jha.
He said police commissioners and districts SPs have been asked to enforce the lockdown in an effective manner.
Essential services like vegetable and milk shops are allowed to remain open, he said, and asked people not to flock in large numbers to such shops.
The state has so far reported 33 COVID-19 cases, and one person has died of the infection.
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‘Amit Shah is lying’: TMC shoots back after Home Minister’s letter to Mamata on migrants
News Network
May 9,2020
New Delhi, May 9: The Trinamool Congress on Saturday responded to Union home minister Amit Shah’s charge that the Mamata Banerjee-led West Bengal government is not facilitating the movement of stranded migrant workers.
Amit Shah has written to West Bengal chief minister Mamata Banerjee, saying her government is doing “injustice” to migrant workers by not allowing the special Shramik trains to reach the state.
“Union home minister Amit Shah speaks after weeks of silence only to mislead people with lies,” the TMC’s Abhishek Banerjee was quoted as saying by news agency PTI.
“The Centre is lying… West Bengal is running 711 camps for migrants in the state. We are taking good care of them,” Abhishek Banerjee, who is also the chief minister’s nephew, said.
Amit Shah had pointed out in his letter that the Centre was not receiving the “expected support” from the state government in helping stranded migrant workers from West Bengal.
“West Bengal government is not allowing trains with migrants reaching the state. This is injustice with WB migrant labourers. This will create further hardship for them,” Amit Shah had said in his letter to Mamata Banerjee.
The issue of migrant workers is the latest flashpoint between the Centre and the West Bengal government amid a row over the state’s efforts to control the coronavirus disease (Covid-19).
The Centre and the state have exchanged allegations over the criteria for reporting deaths from the infection, and while While Bengal says the Centre is trying to politicise a public health crisis, the Union government maintains that state officials are ignoring repeated warnings to step up the fight against the disease.
Federal officials have said that the region has not conducted adequate tests and that there has been mismanagement over identifying hotspots and containing them.
Union home secretary Ajay Bhalla also slammed the state government for a very low rate of testing and high rate of mortality, 13.2%, by far the highest for any state.
The Centre has also accused the state government of not allowing cross-border movement of goods trucks to Bangladesh.
There are 1,678 Covid-19 cases and 160 deaths in West Bengal until Saturday morning.
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Congress expels Scindia for anti-party activities after he meets Modi, Shah
News Network
March 10,2020
New Delhi, Mar 10: Minutes after Jyotiraditya Scindia submitted his resignation to the party membership to Congress chief Sonia Gandhi, the Congress expelled him for anti-party activities after reports emerged that he had met PM Modi and Amit Shah.
Disgruntled Congress leader Jyotiraditya Scindia met Prime Minister Narendra Modi on Tuesday amid indications that he might join hands with the BJP to topple the Madhya Pradesh government.
Sources said Scindia first met Union Home Minister Amit Shah, and then the two leaders met Modi at the prime minister's residence.
Legislators loyal to Scindia, who has been upset with the Congress leadership with his marginalisation in the affairs of the Madhya Pradesh Congress, are likely to quit the party to reduce the Kamal Nath-led government to a minority.
It is likely to be followed by the Bharatiya Janata Party staking claim to form the government in the state.
The Congress President has approved the expulsion of Jyotiraditya Scindia from the Indian National Congress with immediate effect for "anti-party activities," said KC Venugopal, General Secretary Congress.
No person is, nor will be greater than the party: Congress youth wing chief
Indian Youth Congress (IYC) chief Srinivas B V on Tuesday slammed Jyotiraditya Scindia, who has announced his resignation from the primary membership of the Congress, and thanked party chief Sonia Gandhi for expelling the former Guna MP "who was promoting anti-party activities and factionalism".
"The history of 1857 and 1967 was once again repeated," Srinivas B V said, referring to the 1857 Revolt against East India Company and the role of the Scindia royals back then as well as Vijayaraje Scindia's switch from the Congress to the Jana Sangh in 1967.
"I would like to thank Congress president Sonia Gandhiji for taking the strong steps to expel the leader who was promoting anti-party activities and factionalism," the IYC chief said.
"No person is, nor will be greater than the party," he added.
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