COVID-19 Vaccine | Representative image
Benchmark indices edged high on May 5 after RBI Governor Shaktikanta Das announced relief measures to counter the second wave of COVID.
Among other measures, Das announced a term liquidity facility of Rs 50,000 crore to ease access to emergency health services.
Under this scheme, banks can provide fresh lending support to entities like vaccine manufacturers; importers/suppliers of vaccines and priority medical devices; hospitals/dispensaries; pathology labs; manufacturers and suppliers of oxygen and ventilators; importers of vaccines and COVID related drugs; logistics firms.
Additionally, patients can also be given fresh funds for their treatment, Das said.
Read: RBI Governor Shaktikanta Das launches second round of loan restructuring, other relief measures to counter Covid second wave
To incentivise banks to ensure quick delivery of credit under the scheme, RBI has decided to extend priority sector classification for such lending up to March 31, 2022.
These loans will continue to be classified under the priority sector till repayment or maturity, whichever is earlier, Das announced.
Read: Small finance banks on-lending to MFIs to be categorised as priority sector
Banks may deliver these loans to borrowers directly or through intermediary financial entities regulated by the RBI.
As a result of this move, Nifty Pharma jumped over 2 percent. The top gainers was Lupin which surged over 8 percent followed by Sun Pharma, Cadila Healthcare, Alkem Labs and Aurobindo Pharma among others.
Other gainers included Hikal which zoomed 10 percent followed by Wockhardt, Sun Pharma Advanced, Marksans Pharma, Pfizer, Shalby, Metropolis Healthcare and Healthcare Global.
Read: RBI governor Shaktikanta Das' speech: Key highlights
Reacting to the RBI measures, Binod Modi, Head Strategy at Reliance Securities, said the On tap liquidity window of Rs 50,000 crore for three years at repo rate will support the healthcare sector, and classifying this lending as a priority lending (PSL), augurs well.
Dr Joseph Thomas, Head of Research, Emkay Wealth Management feels that it will immediately help ramp up medical and healthcare facilities. The benefits of this will help enhance capacity for the longer term as it covers diagnostic, preventive as well as combative aspects of healthcare.
"The smaller entities like micro finance institutions also benefit from the current package, which will bring some relief to them too which is one of the worst affected sectors as of now," he said.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.