RBI Governor Shaktikanta Das held his second Press conference during the lockdown and announces various measures to boost economy towards recovery. The announcement covers four major aspects that is easing of financial stress, enabling formal working of markets, facilitating and incentivising bank credit flows and lastly maintaining liquidity in the system.
Key Highlights are as Follows:
- The government is planning to announce some financial relief package and measures to benefit the workers, MSMEs, services sector and other industries.
- Taking consideration for payroll support relief for MSME workers.
- MSME and other sectors financial relief may include extension of moratorium on working capital loans and RBI may focus on NBFCs for greater cheaper credit flow of businesses.
- Cash relief for migrant workers and EWS to boost demand
- Non-banking Financial Institutions (NBFCs) may get attention from RBI after MHA eased restrictions.
- Reduction of fixed repo rate under liquidity adjustment facility (LAF) by 25 basis point from 4% to 3.75% with immediate effect.
- Rs. 50,000 crore booster package for NBFCs, HFCs and MFIs
- Special refinance facilities of Rs 50,000 crore to NABARD, SIDBI, National Housing Bank to recover from the lockdown.
- New measures to maintain adequate liquidity in system facilitate bank credit flow, ease financial stress.
- Banks not to make any further dividend pay-out in view of financial difficulties arising from coronavirus.
- 90 day NPA norm does not apply on moratorium granted on existing loans by banks
- Loans given by NBFCs to real estate companies to get similar benefit as given by scheduled commercial banks
- LCR requirement for SCB to be brought down from 100 per cent to 80 per cent
- For large accounts under default, additional provisioning of 20% is required for not implementing resolution in 180 days, this has been now relaxed.
Hence nine major points covered in press conference are:
- Targeted Long Term Operations (TLTRO) 2.0
- Refinancing facilities for All India financial Institutions
- Reduction of reverse repo Rate under Liquidity Adjustment Facility
- Raising Limit of ways and means advances of states and UTs
- Asset Classification
- Extension of resolution Timeline
- Distribution of Dividend
- Lowering of Liquidity coverage ratio requirement
- NBFC Loans to Commercial Real Estate Projects
Check Press Release Here.