Here's what experts are saying about RBI's additional liquidity measures

RBI Governor Shaktikanta Das (PTI)

Reserve Bank of India (RBI) Governor Shaktikanta Das, in a press conference on April 17 announced a number of additional measures to help the economy fight the challenges brought on by the COVID-19 pandemic.

This was the Governor's second press conference after he earlier unleashed a number of reinforcements for the economy on March 27 where he announced a 75 basis point cut in repo rate.

Here is what the experts think about the same.

Housing Development Finance Corporation (HDFC) CEO Keki Mistry said that the measures announced by the RBI would ease the liquidity situation “quite a bit”.

Mahindra & Mahindra Financial Services appreciated the additional liquidity support. “Some of our requirements have been met,” it said.

Rashesh Shah, the chairman and CEO of the Edelweiss Group, said, “LTRO is going to help the bond markets and, thus, NBFCs. Even corporates are in the market to borrow money.”

“It is in RBI's hands to make sure that the financial sector remains viable. We will need more measures going forward. Cash inflows are 5 percent of normal but outflows are 40-50 percent of normal,” he added.

Nilesh Shah, Managing Director - Kotak Mahindra Asset Management, said, “Cut in reverse repo should push banks to lend. There should be a limit on reverse repo if banks do not start lending.”

Nirmal Jain of IIFL Group has said that it will need more clarity on the threshold for what classifies as a small or medium-sized NBFC.

“Need to ensure credit off take picks up fast after the lockdown. We expect that things will get back to normal sooner than most expect. Would look at OMCs, gas utilities, PSU banks,” he added.

Sundaram Finance has said that it will wait for circular. “Seems like there is relief at the headline level,” it said. “It seems like there is relief on the older accounts as well.”

Former chief statistician Pronab Sen said the RBI governor is walking a tightrope. “The government has done what was within its capacity,” he said.

Raj Kiran Rai, MD & CEO - Union Bank, found the announcements By the RBI 'very positive'. “Can always go back to RBI if required. That’s the message today,” he said. “We believe more measures will come in that will help credit growth.”

He said the loan growth would definitely pick up.

Sunil Mehta, CEO - Indian Banks Association (IBA), said, “Once accounts do not slip into NPA, bankers will be willing to lend to them.”

“Seems like our wishes would have been granted today if we asked for something bigger from God,” he told CNBC-TV18.

“For now, it is sufficient. I’m not sure if it’s substantial,” former Deputy Governor RBI HR Khan said. “Need clarity on banks’ lending to NBFCs and MFIs' eligibility for moratorium.”

On March 27, the Governor had also announced a three-month moratorium on term loans of which installments were due between March 1 and May 31.

Piyush Goyal, Minister of Railways and Commerce & Industry, has said that steps by RBI to support the economy will provide liquidity for growth and help India emerge as a world leader in a post-COVID-19 world.

RBI Governor’s announcement to do “whatever it takes” is a massive confidence booster for the economy. RBI is continuously monitoring the economy to support growth. IMF has also projected India as one of the fastest growing countries in the current financial year.

— Piyush Goyal (@PiyushGoyal) April 17, 2020