Reserve Bank Governor Shaktikanta Das has announced no change in the repo rate. The Reserve Bank of India kept the policy rates unchanged in the bi-monthly monetary policy review. The RBI has kept the repo rate at 4 percent after reviewing the monetary policy. Even before the RBI’s monetary policy review, experts said that the central bank would avoid cutting interest rates. Governor Shaktikanta Das said that global economic activity still remains weak. Increased cases of Covid-19 have also tarnished early signs of recovery

In order to relieve the impact of Covid-19, the RBI has allowed the lenders to facilitate restructuring of loans of companies, individual borrowers. If the loan account of the MSME borrowers under pressure is in the standard category, they will also be eligible for restructuring of the loan. To reduce the impact of Covid-19 on families, they will now be given loans up to 90 percent of the value in lieu of gold. Currently it is being given up to 75 percent. Governor Shaktikanta Das said that the startup has been given primary sector status in terms of bank credit.

The Governor said that the real GDP growth rate will remain negative during the first half as well as throughout the financial year. Governor Shaktikanta Das said after the meeting of the Monetary Policy Committee that RBI’s stance will remain liberal. He said that global economic activity remains weak, with the boom in Covid-19 cases weakening early signs of revival.

Das said that economic activity had begun to improve, but as cases of infection increased, many parts of the country were again forced to put a lockdown. The supply chain bottlenecks still remain, leading to inflationary pressures in various sectors.

To reduce the impact of Covid-19, the RBI has approved loan restructuring for banks and corporate borrowers. Apart from this, additional cash of Rs 10,000 crore will be made available to NHB and NABARD. The Monetary Policy Committee estimates that inflation will remain high in the second quarter. It is expected to moderate in the second half of the current financial year. India’s economy is expected to contract in the first half of the fiscal year starting April 2020, the report said.