Coronavirus: RBI’s second shot in the arm to save the economy

While the RBI had announced a slew of financial measures to address the economic fallout due to coronavirus (COVID-19), the unabated impact of the deadly virus on the economy prompted the apex bank to roll out the 2nd set of measures on 17th Apr. Let us see what some of these are:

• Even as the repo rate remained unchanged, the RBI slashed the reverse repo rate to 3.75% to encourage banks to lend more
• Government-owned entities NHB, NABARD, and SIDBI will get special refinancing facilities worth Rs 50,000 crore
• Along with banks, NBFCs, can also defer Date of Commercial Commencement of Operations (DCCO) of realty projects by a year if the delay was for genuine reasons
• Banks are asked to maintain an additional provision of 10% to protect their health while they offer the 3-mth moratorium to borrowers
• Scheduled commercial banks not to make dividend payout for the FY 2019–2020 until further notice
• The LCR (Liquidity Coverage Ratio) required to be maintained by scheduled commercial banks will be slashed from 100% to 80% in a phased manner

Further, the RBI governor Shaktikanta Das also announced that India is expected to make a remarkable recovery in the aftermath of COVID-19, growing at 7% in FY2022.