RBI steps in to ease COVID-19 burden
Why is it in news?
- The Reserve Bank of India stepped in with measures aimed at alleviating any financing constraints for healthcare infrastructure and services.
- India’s economic recovery threatened by the COVID-19 second wave.
- The new measures of RBI will help small borrowers who may be facing distress due to a sudden spike in health expenditure.
- RBI announced a Term Liquidity Facility of Rs. 50,000 crore with tenor of up to three years, at the repo rate.
- This will ease access to credit for providers of emergency health services.
- The banks will provide fresh lending support to a wide range of entities, including:
(1) Vaccine manufacturers
(2) Importers/suppliers of vaccines and priority medical devices.
(3) Hospitals/dispensaries and pathology labs.
(4) Manufacturers, suppliers of oxygen and ventilators and logistics firms.
(5) These loans will continue to be classified under priority sector till repayment or maturity, whichever is earlier.
Scheme for MSMEs:
- RBI also unveiled schemes to provide credit relief to individual and MSME borrowers.
- RBI decided to conduct special three-year long-term repo operations (SLTRO) of Rs. 10,000 crore at the repo rate for Small Finance Banks (SFB).
- The SFBs would be able to deploy these funds for fresh lending of up to Rs. 10 lakh per borrower. This facility would be available till October 31.
Source: The Hindu, PIB