The Reserve Bank of India said Governor Shaktikanta Das will deliver an unscheduled speech on Wednesday as a fierce new wave of coronavirus devastates the country.
The address will be released at 10 a.m. local time, the RBI said on Twitter, without providing further details.
Das met bankers and parallel lenders since last month to discuss topics such as the current economic situation, potential strains on balance sheets, credit flows and liquidity. CNBC reported on Tuesday that bankers had called for relief, including moratoriums on payments, citing banking sources.
The Covid-19 wave that has criticized India in recent weeks will likely get worse before starting to decline sometime later this month, forecasters warn. Pressure from industry groups has started to mount on Prime Minister Narendra Modi to impose lockdowns across the country to stem its spread, a move he has so far resisted to avoid the economic damage suffered last year.
Indian banks have seen a surge in problem loans in their recent results after lenders were allowed to resume classifying bad loans in the wake of the annulment of a decision of the highest court in March. The second wave of coronavirus could increase the pressure on loan repayments, as extended lockdowns in parts of the country hurt businesses and jobs.
Loan growth also fell to a decades-long low of 5.6% in the fiscal year that ended in March.
The RBI increased the Modi government’s tax support measures with loan holidays and cash injections, as well as interest rate cuts. The central bank pledged to maintain a loose monetary policy, although its room for action was limited by inflation concerns.
(Updates with details in the fifth and sixth paragraphs.)