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RBI : Rs 50,000 cr priority lending for hospitals, oxygen, vaccine, drugs

RBI : Rs 50,000 cr priority lending for hospitals, oxygen, vaccine, drugs

The Reserve Bank of India Governor, Shaktikanta Das, in a speech at 10 AM on Wednesday said, “Indian economy was advantageously poised against other countries at the end of the last fiscal. Situation has done U-turn and India is fighting against 2nd wave of Covid-19. Restoring normalcy has become an imperative. RBI will deploy all its resources in services of nation. The devastating speed of covid-19 pandemic spread has to be matched by relevant steps by central bank.”

RBI Governor announces Rs 50,000 cr priority lending by banks for hospitals, oxygen suppliers, vaccine importers, COVID-19 drugs by March 31, 2022. In a relief that is welcome, Governor Shaktikanta Das said RBI has provided 2nd window to individual, small borrowers having up to Rs 25 cr loans for restructuring loans if not availed earlier.

RBI Governor also announced rationalisation of KYC compliance norms, provides for video-based KYC for certain categories.

Special long term repo operations for small finance banks to provide further support to micro, small & other unorganized sector entities, 3-yr repo operations of Rs. 10,000 crore at repo rate, for fresh lending up to Rs 10 lakh per borrower facility up to 31 Oct’ 21, said RBI Governor. In view of fresh challenges, Small Finance Banks are now permitted to regard fresh on-lending to MFIs with asset size up to Rs 500 crore, as priority sector lending, facility available up to 31 March, 2022, announced RBI Governor.

Given the positive response from the market, it has been decided that the second purchase of govt securities for an aggregate amount of Rs 35,000 crores under G-SAP 1.0 will be conducted on 20th May, said RBI Governor Shaktikanta Das.

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Build-up in input price pressures across sectors, driven in part by elevated global commodity prices remains a concern. Inflation trajectory over rest of the year will be shaped by COVID-19 infections and impact  of localised containment measures on supply chains and logistics, explained RBI Governor. But even at this time, in run-up to next MPC (Monetary Policy Committee) when our teams are analysing various incoming data, we don’t expect any broad deviation from projections made in our April MPC but you’ll have to wait for MPC statement due in June 1st week, said Shaktikanta Das.

We have to marshal our resources for fighting the virus with vigour, says RBI Governor. Rail freight registered growth of over 76% yr on yr in April. Toll collections in April suggest mobility declined but unlike abrupt halt during April 2020. Automobiles registration in April 2021 shown moderation compared to March. Tractor segment continues robust pace, says RBI Governor.

The forecast of a normal monsoon by IMD is expected to sustain rural demand and overall output in 2021-22, while also having soothing impact on inflation pressures, added RBI Governor.

Reserve Bank of India will continue to monitor the emerging COVID19 situation and will deploy all resources and instruments at its command especially for the citizens, business entities, and institutions beleaguered by the second wave, averred Governor Shaktikanta Das.

RBI Governor said, “RBI to continue to monitor situation from resurgence of COVID-19 cases; deploy all resources. RBI to continue to monitor situation from resurgence of COVID-19 cases; deploy all resources.” RBI Governor says situation in India has reversed from being on foothills of strong economic recovery to facing a fresh crisis during the 2n corona wave.

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India’s coronavirus deaths rose by a record 3,780 during the last 24 hours, a day after the country became the world’s second, after the United States, to cross the grim milestone of 20 million infections.  Daily infections rose by 382,315 on Wednesday, health ministry data showed.

It has been reported by the media that bankers had asked the RBI for a moratorium of three months, particularly for retail and small borrowers, who have been the worst hit in the second wave of the pandemic. Last year, the central bank declared a moratorium for a total of six months for all borrowers. The announcement of relief needed to be done at the earliest to prevent accumulation of stress, Reuters sources said.

This speech come in the wake of rising Coronavirus infections, which  surged past 20 million in the world`s second most populous nation on Tuesday.

Earlier, RBI had tweeted, “Watch out for the address by RBI Governor.” However, it had given no details about what he would be speaking about.

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