Mumbai, March 27 | The Reserve Bank of India (RBI) put on hold EMI payments on all term loans for three months and cut interest rate by steepest in more than 11 years as it joined the government effort to rescue a slowing economy that has now got caught in coronavirus whirlwind.
RBI has cut repo to 4.4 per cent, the lowest in at least 15 years. Also, it reduced the cash reserve ratio maintained by the banks for the first time in over seven years. The reverse repo rate was cut by 90 bps to 4 per cent, creating an asymmetrical corridor.
CRR for all banks was cut by 100 basis points to release Rs 1.37 lakh crore across the banking system.
The liquidity measures announced include an auction of targeted long-term repo operation of 3-year tenor for a total amount of Rs 1 lakh crore at floating rate and accommodation under Marginal Standing Facility to be increased from 2 per cent to 3 per cent of Statutory Liquidity Ratio (SLR) with immediate effect till June 30.