Finance Minister Nirmala Sitharaman said the RBI has taken a slew of steps to maintain adequate liquidity in the system, incentivise bank credit flows, ease financial stress and enable normal functioning of markets, following difficulties being faced due to Covid-19.
Announcing a second stimulus in less than a month, the RBI eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points to help mitigate risk to the economy posed by the pandemic. “In view of the difficulties being faced due to #COVID19, the @RBI has taken a slew of steps aimed at maintaining adequate liquidity in the system, incentivising bank credit flows, easing financial stress, and enabling the normal functioning of markets,” Sitharaman said in a tweet. In order to increase credit to farmers, MSMEs and housing sector, RBI announced a special refinance facility totalling Rs 50,000 crore for NABARD, SIDBI and National Housing Bank, she said. Of this, Rs 25,000 crore goes to NABARD, Rs 15,000 crore to SIDBI, and Rs 10,000 crore to NHB for improving long-term funding requirements of agriculture and the rural sector, small industries, housing finance companies, NBFCs and MFIs, the Minister said.