As an attempt to strengthen the financial institutions of the country after the anticipated economic slowdown post-COVID-19 lockdown, the Reserve Bank of India (RBI) decided to freeze payments of dividends by banks for the fiscal year 2019-20.
In a televised speech address, RBI governor Mr Shaktikanta Das stated, “It is imperative that banks conserve capital to retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty. It has therefore been decided that in view of the COVID-19– related economic shock, scheduled commercial banks and cooperative banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020, until further instructions.”
RETAIL INFLATION FALL BELOW 4% BY THE MIDDLE OF FY21
With respect to the inflation on the LOCKDOWN declining trajectory due to the COVID-19 lockdown, the RBI has decided to set mid to long term inflation target at 4% with a bias of 2% on both sides. “Such an outlook would make policy space available to address the intensification of risks to growth and financial stability brought on by COVID-19. This space needs to be used effectively and in time”, said RBI governor Shaktikanta Das. The retail inflation fell to the four-month low of 5.91% in March in comparison to the previous month, mainly due to the easing food prices, according to the government data showed on Monday.