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RBI announces additional measures to tackle second wave of coronavirus [Details Inside]

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Rajan Nath
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RBI announces additional measures to tackle second wave of coronavirus [Details Inside]
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RBI Aditional Measures and GDP growth: Amid the second wave of coronavirus, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced that the Policy Repo Rate will remain unchanged at 4 percent and that the Marginal Standing Facility and Bank Rate will remain at 4.25 percent. RBI Governor Shaktikanta Das also announced that Reverse Repo Rate too will remain unchanged at 3.35 percent. He informed that Monetary Policy Committee was of the view that policy support from all sides is required to gain growth momentum and to nurture recovery after it takes root.
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Also Read | Myths and Facts of COVID-19 vaccination in India; here is what PM Modi govt doing to vaccinate Indians RBI Aditional Measures and GDP growth: Amid second wave of coronavirus, RBI Governor Shaktikanta Das announced Repo Rate will remain unchanged.

Economy projected to grow at 9.5 percent in 2021-22

The Governor informed that according to RBI, Real GDP growth is projected to grow at 9.5 percent in 2021-22. Explaining the basis for this, he noted that, unlike the first wave, the impact on GDP growth is expected to be relatively contained in the second wave of coronavirus, with restrictions on mobility being regionalised and nuanced.
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Also Read | Third wave of coronavirus in Maharashtra? Over 8,000 children test positive in 1 district RBI Aditional Measures and GDP growth: Amid second wave of coronavirus, RBI Governor Shaktikanta Das announced Repo Rate will remain unchanged.

RBI Additional Measures

RBI Governor Shaktikanta Das also announced a set of additional measures with the objective of reviving the economy and mitigating the adverse impact of the second wave of the coronavirus pandemic.
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  • On-Tap Liquidity Window for Contact-Intensive sectors: A separate liquidity window of Rs. 15,000 Crore is being opened till March 31, 2022, with tenures up to three years, at the repo rate. Under this scheme, Banks can give fresh lending support to hotels, restaurants, travel agents, tour operators, aviation ancillary services, and other services including private bus operators, rent-a-car service providers, event organizers, spa clinics, beauty parlours and saloons.
RBI Aditional Measures and GDP growth: Amid second wave of coronavirus, RBI Governor Shaktikanta Das announced Repo Rate will remain unchanged.
  • Special Liquidity Facility of Rs. 16,000 Crore to SIDBI, for on-lending / refinancing through novel models and structures at Repo Rate, for a period of up to one year. This is to further support the credit requirements of MSMEs, including those in credit-deficient and aspirational districts.
  • Expansion of coverage of borrowers under Stress Resolution Framework 2.0, by enhancing maximum aggregate exposure threshold from Rs. 25 Crore to Rs. 50 Crore for MSMEs, non-MSME small businesses, and loans to individuals for business purposes.
  • Permission given to Authorized Dealer banks to place margins on behalf of FPI clients for transactions in Govt. securities within banks' credit risk management framework. This will ease operational constraints faced by Foreign Portfolio Investments and promote ease of doing business.
  • Regional Rural Banks can now issue Certificates of Deposit (CDs) Further, all issuers of CDs will be permitted to buy back their CDs before maturity, subject to certain conditions. This will facilitate greater flexibility in liquidity management.
  • National Automated Clearing House (NACH) to be available on all days of the week (currently available only on bank working days), effective from August 1, 2021. NACH is a popular and prominent mode of direct benefit transfer to a large number of beneficiaries, this measure will enhance customer convenience.
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