RBI to pump in ₹1 lakh crore
More funds for NBFCs, Nabard, Sidbi
- The Reserve Bank of India (RBI) announced a slew of liquidity measures to ease financial stress and increase credit flows, while indicating that more room was likely to emerge for reduction in interest rates as inflation softens.
- Among the measures announced was liquidity infusion of ₹1 lakh crore, of which ₹50,000 crore is exclusively for non-banking finance companies (NBFCs), via banks.
- The NBFCs have experienced liquidity shortage since banks have not offered them any moratorium for repayment, while these entities have had to extend the moratorium option to their customers.
- The RBI will extend another ₹50,000 crore to refinancing agencies like Nabard, Sidbi and National Housing Bank.
Help for States
- Separately, RBI also said it has increased the ways and means advances (WMA) limits of States by 60%, over and above the level as on March 31, 2020.
- The move was aimed at providing greater comfort to the States for undertaking containment and mitigation efforts, and to plan market borrowing programmes better, the RBI said. On April 1, the RBI increased the limit by 30%. The increased limit will be available till September 30, 2020.
- Citing the retail inflation numbers of March, which was at 5.9%, RBI Governor Shaktikanta Das said inflation could be on a declining trajectory.
- Recent data showed a softening of food inflation by around 160 bps though in other categories of the CPI, inflation pressures remained firm.