MEASURES BY RBI FOR STRENGTHENING THE ECONOMY

List of measures:

1. The repo rate has been reduced by 40 basis points from 4.4% to 4.0%. The Marginal Standing Facility rate and the Bank rate have been reduced from 4.65% to 4.25%. The reverse repo rate has been reduced from 3.75% to 3.35%.
   
   
2. States have allowed to borrow more from Consolidated Sinking Fund which is being maintained by state governments as a buffer for repayment of their liabilities.
   
   
3. There is Relaxation of Rules under Voluntary Retention Route (VRR), an investment window provided by RBI to Foreign Portfolio Investors, which provides easier rules in return for a commitment to make higher investments.
   
   
4. The RBI had, on April 17, 2020, announced a special refinance facility of ₹15,000 crore to SIDBI at RBI’s policy repo rate for a period of 90 days. This facility has now been extended by another 90 days.
   
   
5. The maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks to exporters has been increased from the existing one year to 15 months, for disbursements made up to July 31, 2020.
   
   
6. A line of credit of ₹15,000 crore will be given to the EXIM Bank, for financing India’s foreign trade. The loan facility has been given for a period of 90 days, with a provision to extend it by one year.
   
   
7. The time period for import payments against normal imports into India has been extended from six months to twelve months from the date of shipment.
   
   
8. The maximum credit which banks can extend to a particular corporate group has been increased from 25% to 30% of the bank’s eligible capital base.
   
   
9. Lending institutions have been allowed to convert the accumulated interest on working capital facilities over the total deferment period of 6 months into a funded interest term loan, to be fully repaid during the course of the current financial year, ending March 31, 2021.