RBI Governor Press Announcements highlights: RBI reduces the rate, extends the loan relief

Announcements: RBI of the Government: 22/05/2020

  1. Term loan moratorium extends to August 31, 2020-The debt moratorium will be continued to August 31 , 2020. Which gives it a six-month moratorium.
  2. Interest deferral on working capital-Interest on working capital is deferred by another 3 months, i.e. until 31 August 2020.
  3. Conversion of interest on working capital to fixed-term loans-Loan agencies is permitted to turn accrued interest on working capital facilities over the deferment period (until August 31, 2020) into a secured interest-term loan (repayable by March 31, 2021).
  4. The margin for Working Capital – Drawing Power – Lending institutions was required to return working capital margins to the original amount by 31 March 2021.
  5. Reduce the repo rate by 40 bps to 4%. The interest rate should then be reduced.
  6. Export Credits-Maximum Allowable Export Credit (Pre and Post Shipping) extended from 12 months to 15 months.
  7. Payment against imports-Extension of the time limit to allow payments against imports from 6 months to 12 months
  8. Help to EXIM Bank-Facility of Rs 15.000 crore credit line for 90 days for US dollar swap facility will be given to EXIM Bank.
  9. Extension of Resolution Timelines-Deferment or moratorium time shall be removed when measuring the 180-day resolution deadline.
  10. Group Financing -Group exposure increased from 25% to 30%
  11. SIDBI support – In order to provide greater flexibility to SIDBI, a further 90-day extension of the 90-day loan facility will be offered.
  12. Trade Impact -Loan moratorium shall have no effect on improvements in asset classification, financial history, and aging requirements, etc.
  13. Trade Impact-The The volume of world trade can fall by 13 percent-32% this year.

    Post by Rajput Jain & Associates

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