RBI is monitoring the situation very closely and has been and will continue to make changes as and when required. These are second such strong measures taken by RBI addressing most of the industry concerns especially on NBFCs ( those were struggling with liquidity) also real estate segment.In this article you can find Key highlights from RBI press meet as on 17th April 2020.
Key Highlights of steps taken on Press meet on 17th April 2020
- A) To provide adequate liquidity in system
- Development of funds has been to large corporates and PSU entities, but impact has been more on small corporates.
- TLTRO 2.0 has been started , for an INR 50000 Crore ( to begin with) the funds will be invested in NBFCs with 50% to the mid sized, small sized NBFCs and MFI
- To provide special refinance for INR 50000 Crore to NABARD – INR 25000 Crore, SIDBI – INR 15000 crore and balance to INR 10000 Crore to enable them to meet sectoral credit needs – additional requirement if any by them may be met by RBI.
- The bank is sitting on higher liquidity ,thus reverse repo is further reduced by 25 basis points from 4% to 3.75% ,other policy rates remains same
- the WMA limit increased for states by 60% to plan there market borrowing better . This will be available till September 2020.
B) To facilitate bank credit – regulatory measures to reduce financial stress
- 90-day NPA Norm classification will exclude the moratorium period.
- The Bank will have to maintain additional 10% provisions on these standstill accounts which can later be adjusted against the provision requirement for slippage requirement.
- In case of large accounts under default an additional provision of 20% required if not completed in 210 days. Recognizing the challenges further 90 days has been added for resolution
- Scheduled Commercial Banks shall not make any dividend payout until further Notice
- Liquidity Coverage Ratio lowered to 80% from 100% from immediate effect
- NBFC loans to CRE projects extends 1-year moratorium without a change in classification which will benefit both NBFC and real estate segment.
- For detailed highlights from RBI press meet please click below.