The Reserve Bank of India (RBI) announced creating a special liquidity window of Rs 15,000 crore with a tenor of 3 years at the repo rate to provide liquidity support to the contact-intensive sectors hit by Covid-19.
The special liquidity window encourages banks to provide fresh lending support to hotels, restaurants, tourism, aviation ancillary services, and other services including private bus operators, car repair services, rent-a-car service providers, event/conference organizers, spa clinics, and beauty parlours/saloons. These sectors have seen the biggest impact due to the second wave as authorities started imposing lockdown measures to curb the spread of the virus. These sectors will be permitted to park their surplus liquidity, equivalent to the size of the loan book created by them under this scheme, under the reverse repo window at a rate which is 25 basis points (bps) lower the repo rate, or 40 bps higher than the reverse repo rate.
“In order to mitigate the adverse impact of the second wave of the pandemic on certain contact-intensive sectors, a separate liquidity window of Rs 15,000 crores is being opened till March 31, 2022 with tenors of up to three years at the repo rate”, said RBI governor Shaktikanta Das in Mumbai after a meeting of the monetary policy committee. The repo rate stands at 4 per cent and the reverse repo rate stands at 3.35 per cent. Among other relief measures taken by RBI to mitigate the impact of the second wave of the virus is, it has expanded the coverage of borrowers under the restructuring 2.0 scheme. Now, MSMEs, non MSMEs small businesses, and loans to individuals with aggregate exposure of Rs 50 crore will be eligible for restructuring. Earlier the threshold was set at Rs 25 crore.