RBI Governor Shaktikanta Das announces SLTRO for small finance banks

Reserve Bank of India (RBI) Governor Shaktikanta Das on May 5 announced a special long-term repo operation (SLTRO) for small finance banks, amid the second wave of COVID-19 cases in the country. The central bank will conduct the special operation of Rs 10,000 crore at repo rate, Das said.

"Small finance banks (SFBs) have been playing a prominent role by acting as a conduit for last mile supply of credit to individuals and small businesses," Das said during an unscheduled address.

Das said that the RBI is monitoring the emerging developments related to the second wave of COVID-19 and its impact on the economy. The global economic outlook is highly uncertain and clouded with downside risks, Das observed.

A forecast of a normal monsoon by the India Meteorological Department is likely to help sustain rural demand and have a soothing impact on inflation pressures, Das said.

infections. "The second wave of infections presents a risk to our growth forecast as the re-imposition of virus management measures will curb economic activity and could dampen market and consumer sentiment," the rating agency had said.

Earlier, S&P Global Ratings had also said that systemic risk in Indian banks is likely to remain high in the wake of the spike in COVID-19 cases and high proportion of weak loans.