RBI’s booster shots to help India’s economy fight the pandemic
“India is expected to post a sharp turnaround and resume its pre-COVID pre-slowdown trajectory by growing at 7.4 per cent in 2021-22.”
– Shaktikanta Das
Governor, RBI on 17th April 2020
Key Highlights: RBI’s booster shots to help India’s economy fight the pandemic
| Measures | Objective |
|---|---|
| NPA classification will now not include the 90- day moratorium on loans | Securing banks' books & entity classification as RBI rolls out aggressive measures |
| TLTRO 2.0 worth Rs 50,000 crore | Liquidity boost to NBFCs, HFCs & MFIs |
| Special refinance facilities of Rs 50,000 cr to NHB, SIDBI and NABARD | Systemic liquidity support to small enterprises |
| LCR requirement for SCB to be brought down from 100 percent to 80 percent with immediate effect | Commercial banks deposit less with RBI, keep more with themselves for liquidity |
| Fixed reverse repo rate under LAF cut by 25 bps to 3.75 percent from 4 percent with immediate effect | Unattractive for commercial banks to deposit with RBI, might as well lend |
| For large accounts under default, additional provisioning of 20 percent is required for not implementing resolution in 180 days. This has now been relaxed. | Breathing space for banks, leaving more towards the banks' liquidity |
