SME Times is powered by   
Search News
Just in:   • Equity indices break two-day losing streak on value buying  • IMF urges Sri Lanka to tighten monetary policy  • Global semiconductor sales to reach $676 bn this year: Gartner  • Tinna Rubber hits upper circuit, investors accumulate 900% returns in year  • Availability of jobs in Japan improves for 1st time in 3 yrs 
Last updated: 11 May, 2021  

RBI.Thmb.jpg RBI's liquidity push

   Top Stories
» Net direct tax collection reaches highest-ever figure in FY 22
» Musk has to manufacture here to sell Tesla cars in India: Gadkari
» Round tripping of industrial inputs by large players unfavourable to local value chains
» Sitharaman engages investors in Silicon Valley
» Modi hails India's success in achieving target of $400 billion of exports
Bikky Khosla | 11 May, 2021

In a welcome move, the RBI last week announced a series of liquidity measures to combat economic turbulence unleashed by the resurgence of Covid-19. They include, amid others, an on-tap liquidity window of Rs 50,000 crore to set up Covid-related healthcare infra, a second tranche of Rs 35,000 crore under government securities acquisition programme, and a 3-year special long-term repo operations of Rs10,000 crore for small finance banks.

It is also noteworthy that the central bank unveiled a new resolution framework for Covid-related stressed assets of individuals, small businesses and MSMEs. Under this new arrangement, small businesses and MSMEs not availing restructuring earlier and having aggregate exposure of up to Rs 25 crore will be eligible to be considered subject to certain conditions, while in respect to those restructured earlier, banks have been permitted to review the working capital sanctioned limits.

These liquidity-pushing measures are encouraging as they will definitely ease liquidity concerns of our businesses and entrepreneurs, thus instilling a sense of security among them, but these measures need to be supplemented by the Centre and states. The vaccination drive must be ramped up and the Centre and states must come together to fight against the pandemic -- for lives of citizens -- and at the same time to safeguard the economy.

Meanwhile, bank credit growth has started to show a concerning trend. It hit a record low of 5.6% in fiscal 2020-21, and according to recent data published by the RBI, slipped further in April. Amid the pandemic situation, while health crisis and related lockdowns are hitting credit demand, banks -- with their work coming to a bare minimum -- are turning more cautious as well. Amid this situation, the latest announcements by the RBI are welcome.

I invite your opinions.

Print the Page
Add to Favorite
Share this on :

Please comment on this story:
Subject :
(Maximum 1500 characters)  Characters left 1500
Your name:

  Customs Exchange Rates
Currency Import Export
US Dollar
UK Pound
Japanese Yen 58.85 56.85
As on 27 Apr, 2022
  Daily Poll
COVID-19 has directly affected your business
 Can't say
  Commented Stories
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter