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Journalism of Courage
Coronavirus (COVID-19): Prime Minister Narendra Modi on Friday praised the Reserve Bank of India (RBI) for its second COVID-19 relief measures, saying that the announcements will greatly enhance liquidity and improve credit supply.
“These steps would help our small businesses, MSMEs, farmers and the poor. It will also help all states by increasing WMA limits,” PM Modi tweeted.
In its second Covid-19 package, the RBI announced measures to provide more liquidity to non-banking finance companies (NBFCs) and relaxed the classification norms for non-performing assets (NPAs), to boost the sagging economy and the financial sector.
RBI Governor Shaktikanta Das said that for all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, 2020, the 90-day NPA norm will exclude the moratorium period. This means there would an asset classification standstill for all such accounts from March 1, 2020 to May 31, 2020.
Explained: How RBI is handling ‘The Great Lockdown’
Stating that Covid-19 has “severely impacted” small and mid-sized corporates, including NBFCs and micro-finance institutions, the RBI also slashed reverse repo rate — the rate at which the RBI borrows funds from banks – and enhanced the ways and means advances to the state governments to address their fund needs.
The central bank also decided to conduct targeted long-term repo operations (TLTRO 2.0) for Rs 50,000 crore in tranches of appropriate sizes.
