InvestorQ : What did RBI Governor announce during his unscheduled speech?
Karim Sahu made post

What did RBI Governor announce during his unscheduled speech?

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Samita Patil answered.
1 month ago
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RBI Governor Shaktikanta Das unveiled a lot of liquidity measures to counter economic disruption due to the ongoing COVID19 pandemic. He announced a slew of measures including the second round of loan restructuring and other relief measures. RBI decided to conduct special three-year long-term repo operations (SLTRO) of Rs 10,000 crore at repo rate for the SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower. This facility will be available till October 31, 2021.
For state governments, the governor announced relaxation in overdraft facilities for state governments. He increased the maximum OD tenor from 36 to 50 days. He further said that states can stay in overdraft for 60 days in a quarter until September-end.

Apart from this, banks are being allowed to utilize 100% floating provisions to make specific provisions on NPAs approved by their board up to March 2022. Banks are also being incentivized to extend swift credit to weak sectors. Lenders will create a COVID loan book in their balance sheets and can park money equal to the COVID book with RBI at 40 bps above the reverse repo rate.

For individuals, small businesses, MSMEs, the government announced that any entity with exposure of up to Rs25crwho has not availed of one-time restructuring will be eligible for resolution framework 2.0. The borrowers must be standard as of March 31, 2021, to be eligible for Resolution framework 2.0. This will be used for lending of up to Rs 10 lakh per borrower.
Reassuring the people of the country, the governor said that he is continuously monitoring the situation and would be ready to provide additional support if the need arises.
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