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Karnataka Bank has said that the measures taken by Reserve Bank of India today will help ease liquidity pressure on the banking system, and help borrowers to a great extent.
Mahabaleshwara MS, Managing Director and CEO of Karnataka Bank, told BusinessLine that the steep reduction in repo rates by 75 basis points is a clear signal for banks to increase lending activity at lower interest rates, mainly to refuel the economy which is under stress due to Covid-19 and the accompanying lockdown.
Terming the three-month moratorium on payment of dues a big relief for the common man, he said it will mitigate the debt-servicing burden. On account of this measure, no account will be treated as an NPA (non-performing asset) effective from March 1, 2020.
It is definitely a way forward to overcome the financial stress caused by Covid-19, he said, adding that this is a much-sought-after relief that banks were expecting in the larger interests of the borrowers.
He said a cut in CRR has also been a long-pending request of banks, and the 100 bps cut from 4 per cent to 3 per cent is a welcome move. This would help improve the bottomline of banks going forward, he added.
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