RBI’s Rescue Plan of Rs 50,000 cr welcome move for shareholders, investors in healthcare

YB WEB DESK. Dated: 5/6/2021 12:28:24 PM


ER ABHA GUPTA Jammu, May 5 RBI Governor Shaktikanta Das in his speech on Wednesday announced a term liquidity facility of Rs. 50,000 crore for alleviating the economic stress due to Covid-19 second wave. The RBI has opened up a hoop of restructuring of loans for individuals and small borrowers for upto 2 years. Only those individual borrowers and small businesses can ask for restructuring of loans for 2 years whose outstanding loan does not exceed Rs. 25 crore and who did not opt in for the restructuring scheme last year. The facility will be accessible till March 31, 2022. RBI governor Shaktikanta Das mentioned that under the plan, banks can assit entities like vaccine manufactures, importers/suppliers of vaccines, hospitals, patients in need, pathology labs, COVID related drugs, logistics firms. In a bid to boost the banks to provide such credit facility further, RBI has instructed to extend priority sector classification for such lending up to March 31, 2022. This means that the loans will continue to be classified under the priority sector till repayment or maturity, whichever is earlier. Besides for small finance banks RBI will have a special long term repo strategy window, whereby the banks can borrow funds upto Rs 10,000 crore at repo rate- 4% for deploying and extending further loans to the potential borrowers. This assistance from the RBI is certainly a welcoming move for the shareholders as well as by the investors in Pharma and the healthcare sector. This motion will persist to boost the liquidity in the market leaving individuals as well as micro-businesses with surplus funds to invest for the long term period which is one of the worst affected sectors as of now. Many of the economists and market experts have reacted to the scheme constructively, as this was something which is the need of the hour. "Banks are expected to create a COVID loan book under the scheme. By way of an additional incentive, such banks will be eligible to park their surplus liquidity up to the size of the COVID loan book with the RBI under the reverse repo window at a rate which is 25 bps lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate," the Governor added.

 

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