Hotels, restaurants, and travel services providers shares gained 1-7 percent on June 4 after the Reserve Bank of India announced a separate liquidity window of Rs 15,000 crore for the COVID-hit hospitality sector.
EIH Associated Hotels was the biggest gainer with 14 percent rally. Advani Hotels, Asian Hotels, Chalet Hotels, Coffee Day Enterprises, Country Club, EIH, ITDC, Indian Hotels, Kamat Hotels, Lemon Tree Hotels, Mahindra Holidays, Oriental Hotels, Royal Orchid, Speciality Restaurants, Burger King India, Taj GVK Hotels, TGB Banquets, and Viceroy Hotels were up 2-7 percent at the time of writing this copy.
"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 crore is being opened till March 31, 2022 with tenors of up to three years at the repo rate," RBI Governor Shaktikanta Das said.
"Under the scheme, banks can provide fresh lending support to hotels and restaurants; tourism – travel agents, tour operators and adventure/heritage facilities; aviation ancillary services – ground handling and supply chain; and other services that include private bus operators, car repair services, rent-a-car service providers, event/conference organizers, spa clinics, and beauty parlours/saloons."
By way of an incentive, banks would be permitted to park their surplus liquidity up to the size of the loan book created under this scheme with the Reserve Bank under the reverse repo window at a rate which is 25 bps lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate, he added.
The RBI's monetary policy committee left the repo rate unchanged at 4 percent and said would continue with the accommodative stance as long as was necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy.
The reverse repo rate under the LAF also remained unchanged at 3.35 percent, and the marginal standing facility (MSF) rate and the bank rate at 4.25 percent.The central bank, however, lowered its economic growth forecast for 2021-2022 to 9.5 percent from 10.5 percent, citing the second coronavirus wave.