It is heartening to note that the central bank has rightly acknowledged the role of SFBs as a true conduit for the last mile supply of credit to India’s growth engine. Equally, the loan amount is capped at Rs 10 lakhs to efficiently reach the intended beneficiaries. Ketan Doshi, MD at PayPoint India said, "The RBI move to create an Rs.10,000 crore Special LTRO for SFBs is very well-timed and a highly proactive move to ease out liquidity to the last mile SMEs amid a raging pandemic. In all, a very nuanced approach to managing the stress felt in the economy.” The announcement of a restructuring framework for individuals and SMEs, the CRR flexibility for lending to SMEs, and the measures to help the State Governments through WMA relaxation are all aimed to tide over the short-term disruptions to economic activity. The decision to augment the lending firepower of Small Finance Banks through priority sector tag is a very welcome move. 50,000 crore fund for ramping up COVID-related healthcare infrastructure reflects RBI’s commitment to transcend boundaries by addressing not only economic health but also public health.
EXPERT CHOICE QUOTES SERIES
We, at Indian Chamber of Commerce, whole heartedly appreciate well directed measures by RBI to support economy and growth."ĭinesh Khara, Chairman, SBI said, “The RBI has continued to calibrate its policy throughout the COVID pandemic, and the series of measures announced today reflects a novel approach.
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This would ease the G-Sec yields, allow an orderly evolution of the yield curve and give needed liquidity support to Government of India. A massive liquidity injection came by way of second purchase of government securities worth Rs 35,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) on 20th May. The RBI has also permitted small finance banks to lend to microfinance institutions (MFIs) with asset size up to Rs 500 crore as part of priority sector lending. Small Finance Banks (SFBs) have also got a boost from RBI by way of a 3-year long-term repo facility of Rs 10,000 crore for fresh lending up to Rs 10 lakh per borrower. ICC feels it is a very timely step and support to small and medium players in healthcare, hamstrung by liquidity. A Rs 50,000 crore liquidity support line was given to banks at Repo Rate for onward lending to entities including vaccine manufacturers, medical facilities, hospitals and also patients.
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Individuals, small business and MSMEs, those who have not availed loan restructuring facility in past, those who had availed but again need support, would be considered by banks.
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Vikash Agarwal, President, Indian Chamber of Commerce (ICC) said, "Indian Chamber of Commerce (ICC) welcomes RBI’s announcement of a series of measures to protect small borrowers and MSMEs amid the raging Covid wave in the country. These decisions by the central bank to tackle the current situation are much appreciated and well-timed to ensure stability and economic revival.” Liquidity support to the healthcare sector is also a commendable step.
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The announcement of restructuring of loans for small borrowers is a proactive move as it will provide some relief against asset downgrade and also provide relief to lenders. The COVID loan scheme will boost economic activity and aid the growth of the MSME’s sector as well. Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE said, "With today’s announcement, RBI focused on the revival of the Indian economy by adding adequate liquidity that ensures further stability of the overall market in the current scenario.