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RBI extends lending outreach to those affected most by Covid-19; great ”equitable” move: ASSOCHAM

”The decision of the RBI Monetary Policy Committee to stay on course with the accommodative stance with a focus on the ”equitable distribution” of liquidity sends an important message from the central bank to be  reaching out to those affected the most by  Covid-19 pandemic, through increased and wider windows for soft lendings ”, ASSOCHAM Secretary General Mr Deepak Sood  said today.

Mr Sood said while keeping the benchmark REPO rates unchanged at 4 per cent was on the expected lines, extension of Rs 15,000 crore special  liquidity window for contact-intensive sectors would help job-oriented sectors, particularly amongst the MSMEs . These include hotels, restaurants, travel agents, tour operators, aviation ancillary services, rent-a-car operators, spas, and salons.

Another window of Rs 16,000 crore for MSMEs through SIDBI would enable financial institutions to reach out to the smaller business entities in this hour of difficulty.

“The increase in the threshold to Rs 50 crore from Rs 25 crore for Resolution Framework 2.0  is a pragmatic decision and would help ease the pressure off the small to mid-sized entities,” the ASSOCHAM Secretary General said. “We would like to thank RBI governor Mr. Shaktikant Das for accepting ASSOCHAM’s recommendations to provide urgent relief to the worst impacted hospitality sector and extend support to the struggling MSME segment”.

He said the decision to enhance the G-SAP limit to Rs 1.20 lakh crore in the second quarter of the current fiscal is a firm signal to the money market of the RBI being in command of the situation even in the midst of a global health emergency.

 ”RBI has been stellar in its performance right through this pandemic crisis with the result that all participants of the financial markets – stocks, bonds, banks, forex – have shown a great amount of resilience and adaptability to the ever-changing situation. Its coordination with the government has been excellent with the result that the fiscal and monetary arms of the system are in perfect sync to face the storm”.

The RBI’s macro projections of 9.5 per cent  growth and retail inflation  of 5.1 per cent for FY’ 22 are in line with the current situation marked by calibrated opening of the economy, to be helped by increasing penetration of vaccination and the ensuing uptick in the rural demand.

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