The Reserve Bank of India (RBI) on Friday announced a reduction in reverse repo rate by 25 basis points from 4 per cent to 3.75 per cent to facilitate bank credit flows amid the coronavirus crisis and subsequent countrywide lockdown which has brought economic activity to a virtual halt. However, it kept the repo rate unchanged. Repo rate is the rate at which the central bank lends money to commercial banks, and reverse repo rate is the rate at which it borrows from them. "The mission is to minimise the epidemiological damage in the country due to coronavirus. I want to convey the RBI's resolve and the way forward," said RBI Governor Shaktikanta Das.

He also announced conducting of targeted long-term repo operation (TLTRO) with Rs 50,000 crore to maintain liquidity in the system, incentivise bank credit flows and enable normal functioning of the market. Banks will be required to invest 50 per cent of the funds under TLTRO 2.0 to small and mid-sized non-banking finance companies (NBFCs).