The economic impact of coronavirus is likely to be much higher than expected. The situation is so bad that for the first time there is a possibility of going negative in the economic growth rate of the country. This is also accepted by RBI. After declaring a 40 basis points reduction in the repo rate, the condition and direction of the economy that RBI Governor Dr. Shaktikanta Das has presented is not going to give hope in any way. However, RBI has not yet set any target of growth rate for the year 2020-21. This is also the first time that despite the end of almost two years of the financial year, the target of annual development has not been set.
For your information, let us tell you that the RBI Governor has announced whatever possible steps can be taken by a central bank to overcome the current recessionary environment. The new repo rate (based on this rate, the banks decide the rate of term loan like home loan, auto loan, personal loan) will now be 4 percent while the reverse repo rate will be 3.35 percent. The duration of the moratorium imposed for repayment of term loan has been extended. According to earlier announcement, this scheme was till May 2020 but now it will be till August 31, 2020.
To give a boost to the economy, the maximum loan limit has been increased from 25 per cent to 30 per cent jointly by one bank in a group of companies. The arrangement made to give more loans to small and medium companies through SIDBI has also been pushed forward. The RBI is a staggering one after the impact of the covid-19 pandemic in March 2020 and has announced measures to end the recession twice before.