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Covid-19 Crisis : RBI Releases New Set Of Measures

As covid-19 continues to choke India’s healthcare system, the Reserve Bank of India (RBI) governor Shaktikanta Das in an unscheduled address, announced a new set of measures for the small and medium businesses and individual borrowers. As India has been facing the wrath of the second wave of the covid-19 pandemic, RBI announced a framework 2.0 for covid-related stress faced by the MSMEs and assets of individuals.

The RBI governor, Shaktikanta Das, said, “The second wave, though debilitating, is not unsurmountable. As I have said earlier, it is during our darkest moments that we must focus on the light. We have lessons to draw from our experience of last year when as a nation we came together and overcame the once-in-a-generation challenge imposed by the first wave of the pandemic.”

RBI also expressed its motive of saving human lives and restoring livelihoods in every way possible.

Here Are The Key Takeaways From The RBI Governor’s Speech Today:

  • To set up an efficient covid-related health infrastructure, RBI announced a targeted liquidity window of INR 50,000 crores. The infrastructure will help India’s healthcare system to cope with the stress put in by the pandemic.
  • Under the covid-related health infrastructure scheme, banks will be able to provide fresh loans to vaccine manufacturers, importers/suppliers of vaccines, hospitals/dispensaries, pathology labs, covid related drugs and covid positive patients for treatment. The amount of INR 50,000 crore announced by the RBI will be lent by banks to hospitals, vaccine manufacturers, and oxygen suppliers on a priority basis by 31st March 2022.
  • The RBI governor said that the cheap loans would be available till 31st March 2022 and pledged to deploy ‘unconventional measures’ and ‘new responses, if the crises worsen any further.
  • To extend its support to the Small, Medium, Micro industries and other unorganised sectors, RBI has decided to conduct special three-year long-term repo operations (SLTRO) worth INR 10,000. The scheme is available till 31st October 2021.
  • Under the newly introduced GSAP- 2.0, RBI announced that it would procure government securities of INR 35,000 crore in the next two weeks.
  • In an attempt to relax rules for the state governments so that they can manage their financial situation in a more efficient manner, RBI increased the number of maximum days of over draft (OD) from 36 to 50 days and 14 to 21 days, in the case of consecutive days. This facility will be available till 30th September 2021.
  • RBI has permitted SFB’s to provide fresh lending to smaller MFIs, having an asset size of up to INR 500 crore. The facility will be available till 31st March next year.
  • Mr. Das said that as per the IMD forecast of normal monsoon, food price inflation could be controlled, and the production is expected to meet the demand.

Watch the RBI governor Shaktikantha Das’s speech here :

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