RBI not in hurry on digital currency

Mumbai: Days after the government said the Reserve Bank of India (RBI) will introduce a digital currency in 2022-23, Governor Shaktikanta Das on Thursday said the central bank does not want to rush and is carefully examining all aspects before introduction of the Central Bank Digital Currency (CBDC). He, however, declined to give any timeline for the launch of the CBDC.

Das on Thursday urged banks and NBFCs to continue the process of augmentation of capital and building up of appropriate buffers to meet future uncertainties.

Unveiling the bi-monthly policy, Das said RBI has been watchful of the impact of the pandemic on the banking and NBFC sectors when the effects of regulatory reliefs and resolutions fully work their way through. The Reserve Bank has accorded the highest priority to preserving financial stability by taking quick and decisive steps to ease liquidity constraints, restore market confidence and prevent contagion to other segments of the financial market, he said. Thus, he said, despite the pandemic-induced bouts of volatility, the Indian financial system has remained resilient and is now in a better position to meet the credit demands as recovery takes hold and investment activity picks up.

RBI has proposed to extend the term-liquidity facility of Rs 50,000 crore offered to emergency health services by three months till June 30, 2022.

Last year in May, RBI had announced an on-tap liquidity window of Rs 50,000 crore, at the repo rate with tenors of up to three years, to boost provision of immediate liquidity for ramping up COVID-19-related healthcare infrastructure and services in the country. Banks were incentivised for quick delivery of credit under the scheme through extension of priority-sector classification to such lending up to March 31, 2022.