RBI big announcements to fight with Covid-19: Reserve Bank of India (RBI) Governor Shaktikanta Das has announced that the second phase of the purchase of Rs 35000 crore government securities (GSAP) will be started on May 20. In view of the negative impact of the second wave of Corona virus on the economy, the Central Bank has announced this. It is believed that the purchase of government bonds will help in reducing the bond yield. Earlier, in April, under the first phase of GSAP, government bonds worth 25000 crores were purchased. It got a great response from the market. To revive the economy from the second wave of Corona, Shaktikanta has made some big announcements.
Explain that there is an inverse relationship between the yield of the bond and the price of the bond. As the price of a bond increases, its yield decreases. The yield increases as the bond price decreases. Bond yields were continuously increasing for some time. An increase in bond yield is not a good sign for an economy. RBI says that the economy started to show recovery after the first wave of Corona, but the second wave has once again created a crisis. These are some big announcements of RBI….
Vaccination intensified across the country
The RBI says that the government is accelerating vaccination to reduce the risk of COVID 19. As vaccination increases, market sentiments will improve. This will provide support to the economy. Let us tell you that vaccination is a good measure for protection from COVID. However, he said that there are signs of recovery in the global economy.
RBI says that Small Finance will give a loan of Rs 10,000 crore to SLTRO for 3 years for the bank. There will be a limit of 10 lakhs per borrower for them. They will get term facility till 31 March 2022.
Expectation of better monsoon
RBI Governor said that the monsoon is expected to be better in the country this year. If a good monsoon prevails, rural demand will increase in the coming days. Earnings of companies will improve due to increase in rural demand.
Video approves KYC
Video KYC has been approved to open a bank account. With this, opening of bank account has become safe and easy during the time of COVID 19. RBI has increased the overdraft of the states from 36 days to 50 days.
50,000 crores for health security
RBI has given Rs 50,000 crore for Emergency Health Security. Under this, banks will give loans to vaccine manufacturers, importers, oxygen suppliers, producers of COVID medicines, hospitals, pathology labs etc. This facility will remain till 31 March 2022. The loan will be at repo rate i.e. very economical interest rate. Hospitals, health service providers will benefit from this.
Micro Finance Institution
Small financial banks lending to micro finance institutions with a size of up to Rs 500 crore will be included in the priority sector. Small finance banks can give loans to a small microfinance institution with a size of Rs 500 crore. This facility will be available till 31 March 2022.
On tap liquidity
The Reserve Bank has also announced on tap liquidity. RBI has opened a window of Rs 50,000 crore for 3 years till 31 March 2022.
RBI has announced restructuring resolution framework 2.0 for SMEs with exposures of up to Rs 25 crore. RBI Governor Shaktikanta Das has announced a set of financial measures to help the common man, small businesses and micro-finance institutions amid the second wave of COVID-19.
The Reserve Bank has also approved to extend the loan moratorium period by 2 years.
Relief to banks
RBI said that banks are being encouraged to give fast loans in weak areas. Banks can create a COVID loan book in their balance sheet and keep the money equal to the COVID book with RBI at 40 bps from the reverse repo rate.