Today, at 10:00 a.m. RBI Governor Mr. Shaktikanta Das made an unscheduled statement.
The governor said that economic situation
has altered drastically due to COVID 2nd wave. After a brief assessment
of the current ongoing situation in the country he announced several measures. Following measures were announced :
1. Term Liquidity Facility of ₹50,000 crore to Ease Access to
Emergency Health Services
a.
On-tap liquidity of ₹
50,000 crore at repo rate is being opened till March 31, 2022.
b.
Under the scheme banks
can support entities including vaccine manufacturers, medical facilities, hospitals
and also patients. Such lending will get priority sector classification till
repayment or maturity.
c.
Banks to create a Covid
loan book under the scheme. Such banks can park liquidity equal to Covid loan
book with the RBI 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.
d.
These loans will
continue to be classified under priority sector till repayment or maturity,
whichever is earlier.
2. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks
(SFBs)
to conduct special
three-year long-term repo operations (SLTRO) of ₹10,000 crore at repo rate for
the SFBs, to be deployed for fresh lending of up to ₹10 lakh per borrower. This
facility will be available till October 31, 2021.
3.
Lending by Small
Finance Banks (SFBs) to MFIs for on-lending to be classified as Priority Sector
Lending
SFBs
are now being permitted to reckon fresh lending to smaller MFIs (with asset
size of up to ₹500 crore) for on-lending to individual borrowers as priority
sector lending. This facility will be available up to March 31, 2022.
4. Credit to MSME Entrepreneurs –
Relaxation provided to MSME
borrowers earlier, in February 2021, according to which Scheduled Commercial
Banks were allowed to deduct credit disbursed to new MSME borrowers from their
net demand and time liabilities (NDTL) for calculation of the cash reserve
ratio (CRR). This exemption is being extended till December 31, 2021 from 31st
October 2021 for exposures upto ₹ 25 Lakhs.
5. Resolution Framework 2.0 for COVID Related Stressed Assets of
Individuals, Small Businesses and MSMEs.
a.
Borrowers, including
individuals and MSMEs, permitted one-time restructuring till September 30,
2021.
b.
This facility will be
available for those having an aggregate exposure of ₹ 25 crore. These borrowers
should have been standard as on March 31, 2021.
c.
Under restructuring
1.0, the period of moratorium can be extended upto a total of 2 years.
6. Rationalisation of Compliance to KYC Requirements – This includes
a.
extending the scope of
video KYC known as V-CIP (video-based customer identification process) for new
categories of customers such as proprietorship firms, authorised signatories
and beneficial owners of Legal Entities and for periodic updation of KYC;
b.
conversion of limited
KYC accounts opened on the basis of Aadhaar e-KYC authentication in
non-face-to-face mode to fully KYC-compliant accounts;
c.
enabling the use of KYC
Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of
electronic documents (including identity documents issued through DigiLocker)
as identify proof;
d.
introduction of more
customer-friendly options, including the use of digital channels for the
purpose of periodic updation of KYC details of customers.
Also, Regulated Entities are being advised that for the customer
accounts where periodic KYC updating is due/pending, no punitive restriction on
operations of customer account(s) shall be imposed till December 31, 2021
unless warranted due to any other reason or under instructions of any
regulator/enforcement agency/court of law, etc. Account holders are requested
to update their KYC during this period.
7. Utilisation of Floating Provisions and Countercyclical
Provisioning Buffer-
Banks have been allowed to
use counter-cyclical provisions for making provisions for bad loans. Such
utilisation is permitted with immediate effect and up to March 31, 2022.
8. Relaxation in Overdraft (OD) facility for States Governments-
In order to provide relief for state
governments, the RBI has permitted them to remain in overdraft for a maximum of
50 days compared to 36 days earlier. The number of consecutive overdraft days
have been increased from 14 days to 21 days. This overdraft facility pertains
to funds states may avail via the RBI’s ‘Ways and Means Advances’ facility.
In his Concluding Remarks, he said
“The immediate objective is to preserve human
life and restore livelihoods through all means possible. The second wave,
though debilitating, is not unsurmountable. As I have said earlier, it is
during our darkest moments that we must focus on the light. We have lessons to
draw from our experience of last year, when as a nation we came together and
overcame the once-in-a-generation challenge imposed by the first wave of the
pandemic………”
For
official speech, click here.
Feel free to contact in case of any query or consultation.
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