RBI allows one-time recast of retail loans to soften Covid blow

THE PLAN WHO’S COVERED WHAT’S IN IT FOR LENDERS

nMUMBAI/NEW DELHI: The Reserve Bank of India (RBI) kept interest rates on hold on Thursday and gave lenders the power to restructure certain loans — including individual as well as corporate loans — as it sought to strike a balance between helping revive growth in pandemic-battered economy and keeping rising inflation in check.

RBI governor Shaktikanta Das sounded a note of caution that a prolonged spread of Covid-19 poses “downside risk” for the domestic economy, but assured that the central bank will use the available monetary space “judiciously” to boost growth.

“At the end of its deliberations, the monetary policy committee (MPC) voted unanimously to leave the policy repo rate unchanged at 4% and continue with the accommodative stance of monetary policy as long as necessary to revive growth and mitigate the impact of Covid-19, while ensuring inflation remains within the target going forward,” Das said after the rate-setting panel concluded its three-day meeting.

Das warned India’s real gross domestic product (GDP) growth is set to contract in 2020-21, but did not give a specific forecast.

The RBI said all loans can be redone once in order to mitigate financial risks

Payments can be rescheduled and interest can be turned into another credit facility with or without a moratorium.

Loans can be extended to a maximum of two years.

nnOTHER MEASURES

People can get loans of up to 90% of pledged gold, up from 75%

This will extend to retail borrowers as well as corporate accounts. For corporate loans, an expert committee headed by KV Kamath will draw out specifics.

Only borrowers classified as standard and not in default for more than 30 days with any lending institution as on March 1 will be covered.

nnRestructuring the loans will help accounts from turning into NPAS, and give lenders the room to keep up credit operations.

Banks to roll out new facility to allow people to upload photo of a cheque they draw

MUMBAI: Consumer confidence in India hit a record low in July, the Reserve Bank of India’s survey released on Thursday showed, with respondents saying they saw the current economic situation as bleak

Card transactions of up to ₹200 can be done offline and reconciled later with damaging disruptions due to the pandemic. The index fell to 53.8 in July from 63.7 in May. The future expectations index for next year, however, rose to 105.4 from 97.9 in May.