MUMBAI: Reserve Bank of India (RBI) governor Shaktikanta Das said measures adopted by the central bank had ensured that interest rates had declined across the board, according to people with knowledge of the matter. He was speaking at a meeting of the central board of the RBI that took stock of the economic situation and the impact of the loan repayment moratorium.
“The governor and deputy governors briefed the board about the overall macroeconomic conditions – both domestic and global; financial sector situation; and the impact of various monetary, regulatory and other measures taken by the RBI in the context of the Covid-19 pandemic,’’ RBI said in a statement after its board meet.
The board also discussed the central bank’s activities during the July 2019 to June 2020 financial year and its budget for the next accounting year starting July 2020 that will end in March 2021 to be aligned with the government’s financial year.
Silent on Loan Restructuring
The RBI was silent on whether one-time restructuring of loans was discussed at all, as had been widely anticipated. A person familiar with what transpired at the meeting said it was not among the topics discussed.
“The governor said RBI measures have ensured that interest rates across the board have come down,” the person said. The board also discussed the record high foreign exchange reserves, but was inconclusive on how they could be used.
Expectations that the restructuring of loans would be discussed at the board meeting rose after finance minister Nirmala Sitharaman said that the government is talking to the RBI to allow banks a one-time restructuring of loans due to the distress caused by the Covid-19 pandemic.
“We are definitely talking with RBI to see if one-time restructuring can be offered, also looking at characterisation of a company as stressed (and) not stressed,” Sitharaman said at an industry interaction on Thursday.
The central bank press release said that “other policy and operational matters” were discussed, without elaborating.
The meeting was held by videoconference and was chaired by governor Shaktikanta Das. Apart from RBI deputy governors, the directors who attended included Tata Group chairman N Chandrasekaran, TeamLease chairman Manish Sabharwal and Sun Pharma MD Dilip Shanghvi.
Source: indiatimes.com