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RBI Reinforces Liquidity Support To Battle Economic Impact Of Covid-19 Second Wave, Here Are The Key Measures
RBI Governor Shaktikanta Das. (Vipin Kumar/Hindustan Times via Getty Images)
India's Reserve Bank will initiate measures to combat economic turbulence unleashed by the resurgence of Covid-19.
In virtual address, RBI Governor Shaktikanta Das announced a number of liquidity enhancement and targeted measures to ease the build of economic strain seen recently.
Accordingly, RBI will conduct the second purchase of G-Secs worth Rs 35,000 crore on May 20.
Besides, RBI announced a targeted on-tap liquidity window of Rs 50,000 crore to set up Covid-related healthcare infra.
Under this liquidity window of Rs 50,000 crore vaccine makers, hospitals, oxygen suppliers among other healthcare stakeholders would be able to get loans at the repo rate till 31 March 2022. These loans will be classified under priority sector lending.
Banks are expected to create a Covid loan book under the scheme. By way of an additional incentive, such banks will be eligible to park their surplus liquidity up to the size of the Covid loan book with the RBI under the reverse repo window at a rate which is 25 basis points (bps) lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate.
Furthermore, the Reserve Bank will allow restructuring for borrowers with exposure of Rs 25 crore, who have not been beneficiaries of RBI's previous loan restructuring schemes.
(The story has been published via a syndicated feed)
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