Breaking News

Mr. Avinash Bagdi, Head of Finance, Covestro India for RBI Monetary Policy

The Reserve Bank of India has further given a stimulus to the economy by announcing the second tranche of liquidity with a 25 basis point reverse repo cut taking it to 3.75 per cent from 4 per cent earlier and has also increased the WMA limit by 60 per cent to provide greater comfort to states in order to mitigate the financial distress.

With this move, the banks will now be able to lend more amid these current circumstances. A Target Long Term Repo Operations (TLTRO) of Rs 50,000 crore announced by the governor specifically targeting the NBFCs has come in the wake of downgrading of economic growth in the current fiscal.

The bold step taken by the Reserve Bank of India (RBI) to ensure smooth functioning of banks and financial institutions will help the country to prevent the economic slowdown curve from steepening. The announcement of excluding moratorium period from 90-day NPA period will prove to be a relaxation of asset classification norms. In view of tightening the financial conditions, the decision to provide special refinance facilities of Rs 50,000 cr to NHB, SIDBI and NABARD is commendable.

Overall, the RBI is committed to maintaining adequate liquidity in the banking system so that it can flow to corporates of small, medium and large size and this will bring relief to the cash flow problems amid COVID -19 crisis.

No comments