Tag: economic crisis

RBI announces fresh relief measures to tackle economic crisis

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced much-needed relief for small and medium-sized financial organisations including NBFCs and MFIs, which have been struggling to operate in the wake of the Covid-19 pandemic. The announcement comes after reports that the government was planning to release another stimulus package to support such smaller businesses, which often borrow from NBFCs and MFIs. It has been decided to provide special refinance facilities for an amount of Rs 50,000 crores to National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), and National Housing Bank (NHB) to enable them to meet sectoral credit needs To empower states for adequate borrowing, the RBI has also increased WMA limits by 60 per cent, to plan their market borrowings better. This facility will be available till September 30. The RBI has also asked all banks to not make any dividend payments to shareholders due to the ongoing financial challenges. The Reserve Bank has brought down the LCR (Liquidity Coverage Ratio) requirement of banks to 80% from 100%, giving more liquidity to banks. Earlier, last month, the RBI cut the repo rate by a massive 75 basis points, while Finance Minister Nirmala Sitharaman had announced a mega economic relief package worth about Rs 1.7 lakh crore.