RBI MPC: RBI has introduced on-tap liquidity of Rs 15,000 crore for the contact intensive sector. This will provide additional lending support to restaurants, bus operators, tourism, beauty parlors and aviation services.
The Reserve Bank of India (RBI) has made a big announcement for the contact-intensive sectors badly affected by the second wave of Coronavirus. RBI has introduced on-tap liquidity of Rs 15,000 crore for the contact intensive sector. This will provide additional lending support to restaurants, bus operators, tourism, beauty parlors and aviation services. RBI Governor Shaktikanta Das said, RBI is fully committed to ensure an environment of financial stability.
RBI Governor said that the focus of RBI is to distribute the liquidity equitably. We need to take a proactive approach to take the economy back on the path of growth. Das said that liquidity of Rs 36,545 crore has been infused into the industry. Another drive will be launched under Government Securities 1.0 (G-Sec) to buy securities worth Rs 40,000 crore.
Facility will be available till 31 March 2022
Announcing the monetary policy, the RBI Governor said that a separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022, with a tenure of up to three years at the repo rate.
They will get fresh loan
Under the scheme, banks will be involved in Hotels and Restaurants, Tourism – Travel Agents, Tour Operators, Adventure and Heritage Facilities, Aviation Ancillary Services – Ground Handling and Supply Chain, and other services such as Bus Operators, Car Repair Services, Rent-a-Car Service providers can provide fresh loan assistance to event organizers, spa clinics, beauty parlors and salons.
Small businesses have been hit the hardest by the second wave of the Kovid-19 pandemic and these RBI measures are expected to bring them relief. While it is not clear whether banks would like to lend to these sectors, given the high risk profile, those who would lend to them would be able to take advantage of RBI incentives.
No change in interest rates
This time the central bank has not changed the repo rate in the monetary policy. It was retained at 4 per cent, while the reverse repo rate will remain at 3.35 per cent.
