oppn parties RBI Reduces Rates, Extends Moratorium And Grants The Facility of FITL

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  • Allahabad HC said that the UP Police is acting as law unto themselves as they detained a person unlawfully even before his arrest
  • Kolkata witnesses traffic snarls on the first day of the Durga Puja festival as revellers start pnadal-hopping
  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
  • Delhi Police detained Cockroach Janta Party founder Abhijeet Dipke, Neha Bora of AISA, student leaders and supporters ahead of a rally in Connaught Place demanding Chief Election Commissioner Gyanesh Kumar's resignation. The protest followed the detention and jailing of two CJP leaders earlier in the week over demonstrations at Jantar Mantar
  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
  • Indian shuttler Jagsher Singh Khangurra secured a bronze medal at the BWF World Junior Badminton Championships in Cairo
  • The Supreme Court of India upheld the Bombay High Court's decision quashing the 2020 write-off of ₹8,415 crore in additional tier-1 bonds issued by Yes Bank (Yes Bank). The court ruled that the bank's administrator lacked the authority to extinguish the bonds under the final reconstruction scheme, strengthening bondholders' claims
  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
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RBI Reduces Rates, Extends Moratorium And Grants The Facility of FITL

By Sunil Garodia
First publised on 2020-05-22 21:27:21

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack

The Monetary Policy Meeting of the RBI met in Mumbai today. In view of the continuing Covid-19 crisis and the economic situation arising out of it, the MPC reduced both the repo rate by 40 bps. Consequently, the reverse repo rate also got reduced by 40 bps. The repo rate now stands at 4 percent and the reverse repo rate at 3.35, just a shade more than the historic low of 3.25 percent in 2008 after the global financial crisis. The MSF rate stands at 4.25%. In addition, the RBI also extended the loan moratorium by three months until August, 2020. It also allowed borrowers to opt for converting the additional interest burden arising out of deferring their loan repayments into a funded interest term loan (FITL) that has to be repaid by the end of March 2021.

The latest intervention by the apex bank is in line with the position of the economy. The committee was of the view that the outlook is highly uncertain and GDP will see contraction and might be in the negative territory in FY21. The committee was also of the view that inflation might go below 4% in the last two quarters of this financial year and hence it kept its accommodative stance.

Despite economic activities being allowed to be restarted as the lockdown is close to being lifted completely, it will take at least two to three quarters for things to return to normal. The reduction in repo rate will make loans cheaper and will provide relief to a large cross-section of borrowers while the reduction of reverse repo rate will ensure that the banks will have no incentive in parking excess funds with the RBI. Since the government has put the entire onus on commercial banks to lend to almost all the sectors of the economy in its Covid-19 economic package, it needed to prod them to earnestly do so.

Similarly, if the loan moratorium was not extended it would have caused immense hardships to both individuals and businesses as they would have had to pay the entire lump sum (EMI plus overdue interest)of the three EMIs of March, April and May in June. With jobs and salaries not guaranteed and with businesses not back on track, there would have been many defaulters. The breathing space allowed (although one feels that it should have been extended until November, with payments in December) will mean that many borrowers will be able to escape being defaulters if things improve by that time. The benefit of converting the accrued interest during this period to FITL comes as a bonus. 

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