"The reserve repo rate has been reduced by 90 basis points to 4 per cent", Das said addressing the media.
The RBI will also allow banks a 3-month moratorium on payments of installments on loans.
This is going to be a huge relief for all EMI payers, especially for those - such as the self-employed - whose income had become uncertain in the wake of the lockdown.
"Priority is to undertake strong and purposeful action to protect the domestic economy, Need for all stakeholders to fight against the pandemic and banks should do all they can to keep credit flowing".
Das said the outlook is now heavily contingent upon the intensity, spread and duration of the pandemic.
Stating that the RBI is at work, the Governor said that the global slowdown can deepen with adverse implications for India. "RBI will conduct auctions of long term repo operation (LTRO) of three-year tenure up to Rs1 lakh crore at a floating rate linked to the policy rate", the RBI Governor stated.
- Reduction of CRR for all banks by 100 basis points.
- Accommodation under Marginal Standing Facility to be increased from 2% from SLR to 3% with immediate effect till June 30.
The RBI has injected liquidity of Rs 2.8 lakh crore via various instruments equal to 1.4 percent of GDP.
Das urged those with deposits in private banks to not indulge in panic withdrawal. He implored Indians not to worry about their bank deposits. The RBI had been on hold since December after five rate cuts in 2019.
The RBI held a monetary policy committee meeting almost a week early to cope with the disruptions to the economy due to a three-week lockdown announced by Prime Minister Narendra Modi on Tuesday.
Asia's third largest economy has been locked down for three weeks since Wednesday, putting millions of daily wage earners and lakhs of businesses in unprecedented hardship.
In an order to mitigate the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic, the central bank announced measures that included moratorium on term loans; deferring interest payments on working capital; easing of working capital financing; deferment of implementation of the net stable funding ratio; and the last tranche of the capital conservation buffer. A relaxation in the NPA classification norms was also sought with a view to helping those who face loss of income.