RBI Monetary Policy August 2020

No Change in Repo Rate

RBI Governor Shaktikanta Das announced that the repo rate will remain unchanged. RBI has taken an accommodative stand to balance growth and inflation.

No further increase in Moratorium

The five-month moratorium on loan payments ends on 31st August 2020. Since no extensions were announced by Governor, we can assume that loan payments need to restart from 1st September 2020. Availing the moratorium leads loan to become bigger due to unpaid interest.

Restructuring of stressed debts of MSME borrowers

RBI allowed stressed MSME borrowers to restructure debt if their loans were classified as ‘standard’ as on 1 March 2020. The MSME loan restructuring scheme was already in place, but, due to the coronavirus, the MSME pain has been aggravated, and this warrants additional support.

Additional liquidity of Rs 5,000 crores announced to be infused in NHB

The policy delivers support to a large range of sectors including NBFCs, HFCs, corporate debt market, debt MF, agriculture and backward districts (for priority sector loans). Increase in LTV for gold loans is another significant step.

Loan to Value (LTV) Ratio incrased for Gold Loans 

In an effort to mitigate the impact of COVID-19 on households, the RBI has increased the permissible loan to value ratio (LTV) for loans sanctioned against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent till 31 March 2021.

Positive Pay System for Clearing of High Value Cheques 

Introduction of Positive Pay on cheques of Rs. 50,000 and above means that an added layer of security has been provided to the instrument. When you issue a high-value cheque, you can upload its details (such as front and back images) to the bank. When the bank receives the cheque from your beneficiary, it will verify the details uploaded by you.

Compiled by :

CA IP Mukesh Mittal

B.Com., FCA

Insolvency Professional

Independent Director

Certified Concurrent Auditor

9215536951, 9813340495

ca.mukeshmittal@gmail.com

https://camukeshmittal.blogspot.com

DISCLAIMER: The Author have taken utmost care while drafting the article but it may occur that certain error creeps in. This article is for academic purpose and should not be treated as a professional advice. The readers are advised to refer the relevant circular or notification before making any judgment.