RBI governor Shaktikanta Das on June 4 announced additional measures to help ailing businesses. Das announced a separate on-tap liquidity window for contact intensive sectors like restaurants, hotels and those involved in the tourism sector, among others.
"In order to mitigate the adverse impact of the second COVID-19 wave on contact intensive sectors, a separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022, with tenors of up to 3 years at the repo rate," Das said.
Catch LIVE updates of RBI MPC monetary policy announcement here
Under the scheme, banks can provide fresh lending support to hotels, restaurants, tourism and travel operators, adventure and heritage facilities, aviation ancillary services (ground handling and supply chains) and other services that include private bus operators, car repair services, rent a car services providers, event/conference organisers, spa clinics and beauty parlours and saloons.
"By way of an incentive, banks will 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," Das said
Read | RBI Monetary Policy: CPI inflation projection rate at 5.1 percent for 2021-22
Meanwhile, the RBI kept the key lending rate unchanged at 4 percent and the reverse repo rate or the central bank’s borrowing rate at 3.35 percent.
This is the sixth time in a row that the Monetary Policy Committee (MPC) headed by Das has maintained status quo.
Also read: Real GDP growth projected at 9.5% in 2021-2022, says Shaktikanta Das
RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low.
The central bank lowered its estimate for economic growth to 9.5 percent for the current fiscal from earlier projection of 10.5 percent due to the impact of the second COVID wave.
With regard to inflation, the governor said that retail inflation is likely to be 5.1 percent during the current fiscal.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
