RBI measures to boost economy
The Reserve Bank of India recently launched a host of measures to protect individual borrowers and the small and medium enterprises in the country.
What are the measures announced?
- RBI has opened on-tap liquidity window of Rs 50,000 crores at repo rate of 4%. This will boost provisions of immediate liquidity. The banks shall provide fresh lending support to the health sectors and others under this. The loans provided under this window will be classified under “Priority sector” till repayment.
- The banks will have to create COVID Loan Book. The banks providing more loans under the scheme shall park their surplus liquidity with RBI up to the size of the COVID Loan Book.
- The Apex bank is to conduct special long term repo operations called the SLRTO. It is to be conducted for three years. The SLRTO is to be conducted at repo rate for Small Finance Banks. It will be conducted for Rs 10,000 crores. The Small Finance Banks will use these funds for fresh lending.
- The Small Finance Banks are now permitted to lend to Micro Finance Institution of size up to Rs 500 crores.
- The maximum number of days of overdraft has been increased from 36 to 50. Also, the number of consecutive days of Overdraft has been increased from 14 to 21. This will help the State Governments to manage their fiscal situation especially in market borrowings and cash flows.
Who are eligible?
The enterprises that have an aggregate exposure till Rs 25 crores and had not availed restructuring framework are eligible for restructuring under this framework.
Month: Current Affairs - May, 2021
Category: Economy & Banking Current Affairs
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