RBI Announces '1 Lakh Crore Booster Package', Relief For SMEs - Viral Bake

The Reserve Bank of India (RBI) on Friday came in with some more relief measures amidst lockdown. After the relief on EMIs the RBI this time had some announcements for the Small and Medium Size Enterprises (SMEs).

The apex bank also announced fueling in of 1 lakh crore in micro-finance institutions and Non-Banking Financial Companies (NBFCs). Out of this 50,000 crore would be bought into the system through Targeted long term repo operations. This would be done in small installments. RBI said based on market evaluations the amount to be fueled in can also be boosted.

The RBI also lowered the reverse repo rate by 25 basis points to 3.75%. The move has been taken to discourage banks from parking money with RBI and instead lend more. The Repo rate remains unchanged at 4.40%. Here are some of the key points from the RBI Governor’s address:

  • Crude oil also remains volatile. India is among a handful of countries with positive GDP
  • No downtime on the net or mobile banking
  • Increase in WMA limit of state govt by 60%
  • The LCR (Liquidity Coverage Ratio) requirement for banks is being brought down to 80% from 100% with immediate effect
  • LCR to be restored to 90 % by October 2020 and 100 % by April 2021
  • Period of resolution plan for NPAs to be extended by 90 days
  • Inflation may settle below the target of 4% by H1FY21, barring any supply-side disruption and shocks

Also Read: Social-Distancing Would Require To Be Practiced Till 2022, Says Harvard University Researchers

The governor said that the moves are announced to address:

  • Maintain adequate liquidity in the system and 6 its constituents in the face of COVID-19 related dislocations
  • Facilitate and incentivize bank credit flows
  • Ease financial stress
  • Enable the normal functioning of markets.

The governor highlighted the IMF’s prediction and said that India is going strong amongst the G20 nations. India’s GDP growth rate projected at 7.4% in FY 2020-21, best among G20 nation, he said.


Like it? Share with your friends!

What's Your Reaction?

hate hate
0
hate
confused confused
1
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
1
love
lol lol
0
lol
omg omg
0
omg
win win
0
win