The Reserve Bank of India on Wednesday announced a series of measures to stand battle ready as the second wave has engulfed India. In order to make easy liquidity facilities available for all healthcare facilities, Governor Shaktikanta Das announced on-tap liquidity of Rs 50,000 crore for Covid-related healthcare infrastructure till march 2022.
Further, banks will be incentivised for quick lending under priority sector lending. The central bank announced relaxation in overdraft facility for state governments. The apex bank empowered banks to relax one-time working capital needs for small business and MSMEs. Das also announced that those who have availed earlier window of restructuring can be given additional 2 years of moratorium. "Those who have availed earlier windows of restructuring can be given additional two years of moratorium. Individuals, MSME and small businesses up to Rs 25 cr loan shall be eligible under resolution 2.0," Das said.
In addition, the RBI announced targeted long-term repo operations for small finance banks of up to Rs 10,000 crore. The funds can be used for lending of up to Rs 10 lakh per borrower. "Counter cyclical provisioning buffers held by banks as of Dec 2020 can be used to make specific provision for NPAs up to Mar 2022. Use of such floating provisions for NPA provisioning to be done after board approvals," Das said.
"The Reserve Bank of India will continue to monitor the emerging COVID19 situation and will deploy all resources and instruments at its command especially for the citizens, business entities, and institutions beleaguered by the second wave," Das said.
"Do not expect any broad deviation in projections made in the April MPC meet. Inflation for the rest of the year will be influenced by COVID restrictions. Do not see any wide variation from our earlier inflation estimate," Das added.
The central bank has also decided to do the second purchase of G-SEC for Rs 35,000 crore under G-SAP 1.0 on May 20.