RBI Governor Press Conference Highlights | RBI monitoring situation, will use all instruments to address COVID-19 challenge, says Shaktikanta Das

RBI Press Conference LIVE

| From the perspective of regulatory norms to spur an economic revival, the measures announced aim to maintain adequate liquidity in the system, facilitate bank credit flow and ease financial stress. These are absolutely welcome, given that economic activity has come to a standstill during the lockdown. The RBI had earlier permitted extension by one year without asset classification downgrade, if DCCO was delayed for reasons beyond control of promoters. This relief is now also allowed for NBFCs; loans by NBFCs to commercial real estate will get the same relief. This move will positively impact NBFCs and real estate. The positive GDP growth forecast by IMF for India at 7.4% post Covid crisis is silver lining amidst dark terrain. Today’s overarching financial instrumental steps announced by RBI assured the constant monitoring of the daunting Human- Economic crisis. Today’s targeted liquidity transfusion measures aimed to improve the yield curve and incentivize banks to deploy more funding to the industry seems to be a kick-start step towards financial resilience: Niranjan Hiranandani,President – Assocham and NAREDCO

Reactions to RBI announcements

| TLTRO 2.0 to pump in additional Rs 50,000 Cr, which was much needed liquidity for NBFC and MFIs across and large and mid-sized firms. This should result in more transmission of funding to the corporate sectors. Additionally, all Standard assets as on March 1, 2020 shall exclude the moratorium period for NPA classification. Hence, there would be a standstill of all such accounts from 3 months period, which was a much needed clarification that was awaited. The market should consider this favorably at this will ease liquidity and credit classifications issues: Rajosik Banerjee, Partner and Head - Financial Risk Management, KPMG in India

Reactions to RBI announcements | Dhiraj Relli

, MD & CEO, HDFC Securities said the RBI 's efforts are three pronged.
- Push Banks to do more lending (by cutting reverse repo rate), providing more liquidity to them (higher TLTRO-2 funds, special refinance facility of Rs.15000 cr to SIDBI and prescribing lower liquidity coverage ratio) and prescribing some reliefs and some fresh moves to create provisions against slippages.
- Provide more credit to NBFCs (especially smaller ones) by prescribing that atleast 50% of funds under TLTRO-2 must be on lend to such entities. The special refinance facilities of Rs.10000 cr to NHB will help housing finance companies avail more liquidity. Also NBFCs can grant relaxed NPA classification to their borrowers and NBFCs can extend realty loans by 1 year if projects delayed on reasons beyond control.
- Alleviate the woes faced by State Govts by increasing by 60% the States Ways & Means Advances (WMA) limit to provide greater comfort to states.
He added that NBFCs are clear beneficiaries of these measures. For investors in Banks the provision of higher liquidity and relaxation in provisioning norms are welcome, but the bar on dividend distribution and new provisioning norms are negatives for the time being. While the RBI is doing its part in providing reliefs in the current times, the street could keep expecting more and there could also be some concern about the time it would take for these measures to have an impact at the ground level.

Reactions to RBI announcements

| We are extremely delighted and find a great sense of reassurance with the central bank taking cognizance of specific problems faced by real estate sector and proactively taking targeted measures to address those issues. The measures taken for liquidity support to NBFCs, HFCs and MFIs will meaningfully help the cause of the real estate sector. The move on reduction of reverse repo rate by 25 basis points shall push banks to open up the credit flow to economic activities. Similarly, allowing a 90 day extension for asset classification to loans that have been granted moratorium window is a critical step to assuage credit quality concern of lenders. Considering the lockdown and the impact on migrant labour workforce, there will be an inevitable delay in construction activity in real estate projects. Taking note of the situation, the central bank has provided one year project completion extension on asset classification for NBFC loans to CRE segment. Considering NBFCs have been very active in this segment, this announcement will ease the pressure of this segment too: Shishir Baijal, Chairman & Managing Director, Knight Frank India

Reactions to RBI announcements

| RBI has provided supplementary measures to address financial market liquidity, NPA recognition and operational concerns. Key measures which are likely to have a positive impact are a reverse repo cut, additional targeted LTRO for NBFCs and additional funds for HFC. This along with relaxation in NPA classification norms is likely to sooth markets. We also expect RBI and government to bring in a COVID bond or monetize central government deficits. This could happen down the line. RBI's whatever it takes stance is encouraging. Market off highs is largely due to volatility: Sahil Kapoor, Chief Market Strategist at Edelweiss Broking

Reactions to RBI announcements

| Highly anticipated liquidity measures announced to support NBFCs, HFCs, MFIs, Co-operative Banks and RRB’s through refinancing available from NABARD, SIDBI and NHB and also access to TLTRO 2.0 to be made available by Banks. A welcome immediate relief not only to these Institutions but also to their borrower base. Further, standstill on NPA classification on standard overdue accounts, as on February 29, which will avail moratorium will be a huge relief to such borrowers. However, these accounts will attract 10 percent provision which will block Bank’s capital against existing credit and hence, will not be available for new credit. Banks will need to do a balancing act between extending moratorium and providing new credit due to this provisioning requirement: Sanjay Doshi, Leader – Financial Services Advisory, KPMG in India

Reactions to RBI announcements

| RBI’s latest announcements to infuse liquidity and expand bank credit are expected to provide big relief to the NFBC sector as 50 percent of the proposed TLTRO worth Rs 50,000 crore will be invested in small and mid-sized NBFCs and MFIs. The Central Bank has also relaxed NPA recognition norms for NBFCs. Banks would also get relaxation on Special mentioned a/c, which are unpaid with 60-90 days as on March, but have to make 10 percent provisioning against such standstill accounts: Sundar Sanmukhani, Head of Fundamental research desk at Choice Broking

RBI's Targeted Long Term Repo Operations: All your questions on TLTRO answered

Reactions to RBI announcements

| Another cut in reverse repo is intended to disincentivise banks from parking funds with the RBI and to incentivise them to lend to the real economy instead. Combination of measures to boost liquidity, improve monetary transmission and relax repayment schedules is the need of the hour in which RBI has been proactive and repeatedly insisting that they would do whatever it takes. Of course this provides much needed liquidity and positive message for NBFC especially and a much elaborated stimulus package is awaited: Abhishek Goenka, Founder & CEO, IFA Global

Reactions to RBI announcements

| RBI’s big bang stimulus was not a bazooka afterall, given the expectations, rather it was a conservative approach and indicated a piecemeal manner of infusing liquidity. The measures though significant were not substantial enough as a mere Rs 50,000 crore in the form of TLTRO is rather conservative. However, for the moment major concerns have been addressed as real estate and NBFC sectors have received massive relief, NBFCs (small and large) have liquidity coming in from TLTRO 2.0, financial institutions like SIDBI, NABARD and NHB have received liquidity directly from the RBI and there is relief on the NPA recognition and stressed asset reclassification for Banks. To add to it, a 25 bps reduction in the fixed reverse repo rate will enable banks to lend further and improve liquidity in the system. This has definitely boosted investor confidence as the quarterly numbers to be published by corporates will no longer be a horror story. Additionally, RBI’s openness of providing further relief if the situation worsens further is a big relief in these distressed times: Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote

Reactions to RBI announcements

| RBI’s big bang stimulus was not a bazooka afterall, given the expectations, rather it was a conservative approach and indicated a piecemeal manner of infusing liquidity. The measures though significant were not substantial enough as a mere Rs 50,000 crore in the form of TLTRO is rather conservative. However, for the moment major concerns have been addressed as real estate and NBFC sectors have received massive relief, NBFCs (small and large) have liquidity coming in from TLTRO 2.0, financial institutions like SIDBI, NABARD and NHB have received liquidity directly from the RBI and there is relief on the NPA recognition and stressed asset reclassification for Banks. To add to it, a 25 bps reduction in the fixed reverse repo rate will enable banks to lend further and improve liquidity in the system. This has definitely boosted investor confidence as the quarterly numbers to be published by corporates will no longer be a horror story. Additionally, RBI’s openness of providing further relief if the situation worsens further is a big relief in these distressed times: Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote

Coronavirus pandemic | RBI relaxes WMA limits for states; could pave the way for FRBM limit easing

Reactions to RBI announcements

| LTRO is going to help the bond markets and thus the NBFCs. Even corporates are in the market to borrow money. We will need more measures going forward. Cash inflows are 5 percent of normal but outflows are 40-50 percent of normal: Rashesh Shah, CEO, Edelweiss Group told CNBC-TV18

Reactions to RBI announcements

| The further cut in the reverse repo rate to 3.75 percent is likely to nudge the banks to explore alternative sources of fund deployment. With the average CPI inflation expected to cool to around 4 percent with a downside bias in FY21, we expect that the repo rate could subsequently be pared by the MPC by a further 40 bps to 4.0 percent, which would likely transmit into an additional step down in the reverse repo rate as well: Aditi Nayar, Principal Economist, ICRA

Market Update

| Bank Nifty is up over 3 percent after RBI cut reverse repo rate. Follow Market LIVE for more updates

NBFCs, HFCs, NBFC-MFIs now allowed to operate

Prior to RBI Governor Shaktikanta Das' media address, the Ministry of Home Affairs (MHA) issued an order allowing non-banking financial companies (NBFCs) - including housing finance companies (HFCs), microfinance institutions (NBFC-MFIs) and cooperative credit societies from the financial sector - to function during the lockdown period with bare minimum staff. Read more here

Reactions to RBI announcements

| RBI’s announcement on TLTRO 2.0 for an amount of Rs 50,000 crore specifically for deployment in investment grade mid and small NBFCs is expected to address the emerging liquidity crisis in the NBFC and the HFC sector. Additionally, another Rs. 50,000 core refinance window will be opened from NABARD, SIDBI and NHB which is expected to partly meet the requirements of NBFC-MFIs. We had already put up a study on retail NBFCs sometime back where we had estimated that the top 11 companies in that segment will need refinancing to the extent of Rs. 10,000-20,000 Cr to sustain their operations and service their existing debt instruments. Clearly, the amount will be substantially higher for the whole NBFC and HFC sector and particularly in a scenario where they don’t get the moratorium from banks, something on which clarity is yet to emerge. In that context, the steps on TLTROs and refinance from FIs will go a long way to meet these short term liquidity gaps in the shadow bank sector and ensure their sustainability and therefore, financial stability in the crisis period: Suman Chowdhury, Chief Analytical Officer at Acuité Ratings & Research

Reactions to RBI announcements

| In a span of 20 days, RBI announced the second round of liquidity boosting measures to address the economic crisis due to COVID-19, with special focus on NBFCs and MFIs. TLTRO and reduction of reverse repo rate to 3.75 percent is expected to improve liquidity in the NBFC sector. Similarly, the loans given by the NBFCs to real estate to get similar benefits as given by commercial banks is a support to both the NBFC and real estate sector: Deepthi Mary Mathews, Economist at Geojit Financial Services

Reactions to RBI announcements

| RBI has reaffirmed its commitment to support the economy and the markets, and have announced an additional Rs.50000Crs TLTRO. This would be targeted at supporting corporates and smaller private entities. But the issue is that there no lending by banks nor any investment into sectors that require more support. Banks are parking with RBI on a daily basis an amt close to Rs. 6 Lakh core, so whatever money they have with them and whatever they are getting from RBI, the banks are giving back to RBI instead of investing it or lending it. The reverse repo rate cut is to discourage thus reverse flow to RBI. But is doubtful whether this flow can be stemmed easily. Banks are not lending or investing because they fear that under the current conditions they may be adversely impacted if they employ the money for investments or lending. Even three months back the approach of the banks was one of extreme caution. RBI has now specified where the money should go to encourage sectoral lending. Once a clear channelization of credit to segments or sectors that require the support is achieved, the economy will get the much-needed stimulus: Joseph Thomas, Head of Research at Emkay Wealth Management

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RBI Governor Shaktikanta Das said the regulatory measures announced so far are dovetailed into the objective of preserving financial stability in light of the coronnavirus pandemic. "We stand united and resolute. Eventually we shall cure and we shall endure," was his message.

Indian rupee rises 45 paise to 76.42 against US dollar post RBI presser

Reactions to RBI announcements

| RBI's move today addressed some of the liquidity problems particularly for NBFCs, MFIs and state governments. MSME sector should also get some liquidity boost. The picture for banks is mixed. Temporary elongation of NPA recognition period and lowering of liquidity coverage ratios are positive. Cut in reverse-repo rate and continued need for provisioning on overdue credit. Increased TLTRO and WMA limit for state governments should keep bond yield range bound. This should benefit PSU banks with sizable excess reserve. Reverse-repo rate cut should marginally nudge banks to lend. If credit growth does not accelerate, would expect the cut in reverse-repo to continue: Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers

Reactions to RBI announcements

| RBI has come out with announcements with far reaching beneficial consequences to the financial system and the economy in this difficult time. Measures to maintain adequate liquidity in the system, incentivise further commercial bank lending by cutting reverse repo rate to 3.75 percentand facilitating normal functioning of markets are indeed laudable. Particularly, announcement of LTRO 2 of Rs 50,000 crore for targeted funding to NBFCs and MFIs will be beneficial for this segment. Refinancing of Rs 50,000 crore to Nabard, SIDBI and NHB is another welcome move. The reclassification of NPA norms from 90 days to 180 days is a great relief to commercial banks. In brief, this is a big bazooka but with caution and prudence. Enhancement of Ways & Means advances to states by 60 percentwill be a relief to states stressed by the pandemic: VK Vijayakumat, Chief Investment Strategist at Geojit Financial Services

Here's what experts are saying about RBI's additional liquidity measures

Reserve Bank of India (RBI) Governor Shaktikanta Das, in a press conference on April 17 announced a number of additional measures to help the economy fight the challenges brought on by the COVID-19 pandemic. This was the Governor's second press conference after he earlier unleashed a number of reinforcements for the economy on March 27 where he announced a 75 basis point cut in repo rate. Here is what the experts think about the same.

Reactions to RBI announcements

| Once accounts do not slip into NPA, bankers will be willing to lend to them. Seems like our wishes would have been granted today if we asked for something bigger from God: Sunil Mehta, CEO - Indian Banks Association (IBA) told CNBC-TV18.

Reactions to RBI announcements

| For now, it is sufficient. I’m not sure if it’s substantial. Need clarity on banks’ lending to NBFCs and MFIs' eligibility for moratorium: HR Khan, former Deputy Governor of RBI said.

RBI announces additional measures to fight slowdown; key highlights from the presser

The Reserve Bank of India (RBI) Governor Shaktikanta Das announced additional measures, including reducing reverse repo rate, to support the economy hit by COVID-19 on April 17. Here are the key takeaways from the central bank's address to the media

RBI Governor Shaktikanta Das: Liquidity coverage ratio of banks being brought down to 80%

Reactions to RBI announcements

| The announcements by the RBI are very positive. Can always go back to RBI if required. That’s the message today. We believe more measures will come in that will help credit growth. The loan growth will definitely pick up:RajKiranRai, MD & CEO - Union Bank

Reactions to RBI announcements

| "The RBI governor is walking a tightrope. The government has done what was within its capacity:Former chief statistician Pronab Sen

Reactions to RBI announcements

| Will wait for circular. Seems like there is relief at the headline level. It seems like there is relief on the older accounts as well:Sundaram Finance

RBI Governor Shaktikanta Das announces TLTRO 2.0 for Rs 50,000 crore

RBI Press Conference | RBI Governor Shaktikanta Das launches Round 2 of liquidity bonanza; this time for small NBFCs, MFIs, writes Dinesh Unnikrishnan

Reserve Bank of India (RBI) governor, Shaktikanta Das on Friday announced the second round of measures to address the COVID-19 crisis by launching a series of liquidity easing steps specifically targeting the Non-banking finance companies (NBFCS) and MFIs that have been suffering on account of tight cash conditions.
Targeted Long term repo operations (TLTRO) worth Rs 50,000 crore to begin with, in tranches of appropriate sizes. Based on our assessment, the RBI will increase the size of the TLTRO, Das said. The funds availed by banks should be invested in investment-grade bonds companies and at least half of the funds should go to small NBFCs and MFIs, Das said.
This is positive for MFIs that have been suffering from liquidity drought. Further, the RBI also announced refinancing measures to the tune of Rs50,000 crore for all India financial institutions such as Nabard, SIDBI and NHB. Also, the reverse repo rate reduced to 3.75 percent from 4 percent.
Read more here

RBI Press Conference | Round-up of all the announcements made by RBI Governor Shaktikanta Das on April 17

- NPA classification will now not include the 90- day moratorium on loans.

- Another liquidity boost through TLTRO 2.0 worth Rs 50,000 crore to begin with for NBFCs, HFCs and MFIs

- Special refinance facilities of Rs 50,000 cr to NHB, SIDBI and NABARD

-LCR requirement for SCB to be brought down from 100 percent to 80 percent with immediate effect

- Fixed reverse repo rate under LAF cut by 25 bpsto 3.75 percent from 4 percent with immediate effect

- For all accounts where moratorium or deferment has been applied, there would be an asset classification standstill

- DCCO delayed for reasons beyond the control of promoters, can now be extended by one year without asset classification downgrade. This relief is now also allowed for NBFCs.

-For large accounts under default, additional provisioning of 20 percent is required for not implementing resolution in 180 days.This has now been relaxed.

-Banks shall not declare dividends until further notice

RBI Press Conference | The announcements covered four key points:

Maintaining liquidity in the system
Facilitating and incentivising bank credit flows
Easing financial stress
Enabling formal working of markets

Moratorium period excluded from NPA classification: RBI Governor Shaktikanta Das

Market LIVE Updates: Nifty below 9,200; RBI reduces reverse repo rate

Benchmark indices erased some of early gains with Nifty below 9200.TheSensexis up 628.79 points or 2.05% at 31231.40, and the Nifty up 177.90 points or 1.98% at 9170.70. About 1457 shares have advanced, 422 shares declined, and 95 shares are unchanged. Read more here

RBI Press Confernce LIVE

| Overarching aim is to keep financial systems sound, liquid and smoothly functioning so that finance keeps flowing to all stakeholders, especially the vulnerable and disadvantaged. regulatory measures announced so far are dovetailed into the objective of preserving financial stability. We stand united and resolute. Eventually we shall cure and we shall endure: Governor Shaktikanta Das

RBI Press Conference LIVE

| This will give us space to address any financial instability brought about by COVID-19. This space needs to be used effectively and in time. RBI will monitor the evolving situation continuouslyand use all its instruments to address challenges posed by the pandemic: Governor Shaktikanta Das

RBI Press Conference LIVE

| Inflation may settle below target of 4% by H1FY21, barring any supply side disruption and shocks: Governor Shaktikanta Das

RBI Press Conference LIVE

| Daily data on essential food items, covered by the Department of Consumer Affairs suggest that food prices have increased by 2.3% till April 13. Onion prices however have continued to decline. PDS kerosene prices have slumped by 24% in first fortnight of April. Domestic LPG prices also declined by 8%These developments suggest that inflation is on a declining trajectory having fallen by 170 bps to from January 2020 peak: Governor Shaktikanta Das

RBI Press Conference LIVE

| NSO on April 13 showed that CPI infaltion for March declined by 70 bps to 5.9 percent. This is however, based on data gathered up to March 19. The data showed softening of food inflation by around 160 bps on account of easing of prices of vegetables, eggs, pulses, meat, fish, etc. In other categories of CPI inflation pressure remain firm: Governor Shaktikanta Das

RBI Press Conference LIVE

| Decided for all accounts where moratorium or deferment has been applied, there would be an asset classification standstill. NBFCs have flexibility under current accounting standards to provide relief to borrowers. The standstill provision will be from March 1 to May 31 and banks will have tomaintain higher provisions of 10 percenton standstill accounts. For same period as the original announcement provisions can be adjusted later for actual slippages on such accounts: RBI Governor Shaktikanta Das

RBI Press Conference LIVE | 

Had earlier Permitted if thedate of commencement of commercial operations (DCCO) isdelayed for reasons beyond control of promoters, it can be extended by one year without asset classification downgrade. This relief is now also allowed for NBFCs.Loans given by NBFCs to commercial real estate to get same relief. This is to ease NBFCs and the real estate sector. New measures shall be announced as and when need arises: Governor Shaktikanta Das

RBI Press Conference LIVE

| The LCR requirement of scheduled commercial banks being brought down from 100 percent to 80 percent with immediate effect. This shall be restores to 90 percent by October 2020 and 100 percent byApril2021:GovernorShaktikantaDas

RBI Press Conference LIVE

Scheduled commercial banks and other financial institutions are to make additional 20 percent provision.Due to the challenges of resolutions of accounts, period of resolution will be increased by (further) 90 days. Extension of resolution timeline for large accounts under default, additional provisioning of 20 percentis required for not implementing resolution in 180 days. Relaxing additional 20 percent will be provisionedunder June 7 circular. Banks need to conserve capital andabsorb losses. Banks will not make dividend payout from FY20 until further notice

RBI Press Conference LIVE

| Banks to maintain higher provision at standstill, which can be adjusted later for actual slippages: GovernorShaktikantaDas

RBI Press Conference LIVE

| Clashflow of households and businesses affected. We recognise that COVID-19 has challenged the ability of borrowers to repay. Thus the NPA count shall not include the 90-day moratorium period: GovernorShaktikantaDas

RBI Press Conference LIVE

| Additional regulatory measures being announced today, consistent with BASEL guidelines. First on asset classification: Governor Shaktikanta Das

RBI Press Conference LIVE

| On April 15, 6.91 crore surplus from the system. To allow banks to use this surplus into economy,reverse repo rate is beingreduced by 25 bps from 4% to 3.75% under Liquidity adjustment facility (LAF): GovernorShaktikantaDas