The Reserve Bank of India (RBI) will give banks Rs 50,000 crore to enable them to lend further for “healthcare needs” in the Covid-19 crisis, said governor Shaktikanta Das on Wednesday.
“India has mounted a valiant defence against Covid-19. The RBI will continue to monitor the emerging situation and deploy all instruments at its command,” said Das at an unscheduled briefing where he listed measures the central bank will take to support the economy during a second wave of infections.
“On-tap liquidity of Rs 50,000 crore at repo rate is being opened till March 31, 2022. Under the scheme banks can support entities including vaccine manufacturers, medical facilities, hospitals and also patients,” said Das.
The scheme will allow banks to support vaccine manufacturers, medical facilities, hospitals and patients as well. Such lending will get priority sector classification till repayment or maturity.
Das did not announce a moratorium on loans as some analysts had predicted but said the central bank remained in “battle mode” to meet demands of the economy.
“The fact that there is no moratorium announcement will be seen by the markets as positive since the message is that the situation is not bad as to warrant another moratorium,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Article source: https://www.business-standard.com/article/economy-policy/rbi-announces-on-tap-liquidity-of-rs-50-000-cr-for-covid-19-healthcare-121050500290_1.html