RBI keeps key policy rates unchanged
The Reserve Bank of India kept its powder dry in the third review of the monetary policy since the COVID-19 pandemic spread in the country, leaving key policy rates unchanged in the face of rising inflation pressures but asserted that propping up economic recovery has assumed “primacy” in the “worst peace-time health and economic crisis of the last 100 years”.
- The central bank didn’t extend the moratorium on loan repayments offered to borrowers beyond August 31 but allowed banks to restructure loans from large corporates, micro, small and medium enterprises as well as individuals to help stem the rising stress on incomes and balance sheets.
- These restructuring efforts may or may not include a moratorium on instalment repayments, the RBI said, leaving the decision to banks, with an eye on averting such loans from slipping into non-performing assets.
- With incomes and jobs taking a hit across sectors, the RBI has allowed banks to restructure individual borrowers’ loans by December 31, 2020, permitting a maximum extension of two years. Limits for loans against gold were also enhanced.