RBI move evokes positive response

Mumbai EVEN as the country's economy is faced with the second wave of Covid-19, a slew of measures as announced by the RBI has been well-received by all the stakeholders.

On-tap liquidity of Rs 50,000 crore at repo rate is being opened until March 31. Under the scheme banks can support entities including vaccine manufacturers, medical facilities, hospitals and also patients. Such lending will get priority sector classification till repayment or maturity. Banks are likely to create a Covid loan book under the scheme. Such banks can park liquidity equal to Covid loan book at 40 basis points above the reverse repo rate.

Bankers had reportedly asked the RBI for a three-month moratorium, particularly for retail and small borrowers. S&P Gobal Ratings on Wednesday said the second wave of Covid infections may derail a strong recovery in Indian economy and credit conditions.

It went on to project a lower than previously anticipated GDP growth rate in different scenarios. Against 11 per cent GDP growth it had projected March, S&P Ratings saw growth rate dropping to 9.8 per cent under the 'moderate' scenario where infections peak in May, and falling to as low as 8.2 per cent under 'severe' scenario under which caseload would peak only in late June.

Das said the central bank sees the outlook as 'highly uncertain' and clouded with downside risks, but does not see a major change to inflation forecast. "As the financial year 2020-21 (April 2020 to March 2021) - the year of the pandemic - was drawing to a close, the Indian economy was advantageously poised, relative to peers. India was at the foothills of a strong recovery, having regained positive growth, but more importantly, having flattened the infection curve. In a few weeks since then, the situation has altered drastically," he said. "As in the recent past, the RBI will continue to monitor the emerging situation and deploy all resources and instruments..," he added.