RBI Governor Shaktikanta Das said on Friday that the country is expected to post a sharp turnaround in the next financial year, citing International Monetary Fund (IMF) projections. This is the second time the RBI Governor is addressing the media since India began the lockdown on March 25. His address comes at a time when the country has extended a 21-day lockdown to curb the spread of the coronavirus (COVID-19) pandemic, which has disrupted world markets and fuelled fears of recession.
India is expected to grow at 7.4 per cent in 2021-22 as per IMF projection, the RBI Governor Shaktikanta Das said. IMF has projected GDP growth of 1.9 per cent for India in 2020, which by itself is the highest among G20 countries. This is especially noteworthy, given that global economy is headed into recession in wake of the Covid-19 pandemic. The IMF has already estimated cumulative loss to global GDP in 2021 and 2022, at $9 trillion, which is greater than the combined economies of Japan and Germany.
Meanwhile, RBI Governor Shaktikanta Das unveiled a slew of money market measures to protect the financial system from adverse fallout of coronavirus outbreak, while assuring the country that the central bank is proactively monitoring the evolving situation.
In a major relief to the borrowers amid the nationwide lockdown, RBI has said that the moratorium period will be excluded from the classification of non-performing assets (NPAs). On March 27, RBI had granted three-month moratorium to lending institutions. This would mean that the 90-day NPA norm will not be applicable on moratorium granted on existing loans by banks.
RBI has cut the reverse repo rate, key rate at which it borrows funds from banks, to 3.75 per cent from 4 per cent. The central bank has also provided special finance facility of Rs 50,000 crore to financial institutions.