E-Paper
RBI asks banks to build Covid loan book for vaccine makers, hospitals
Reserve Bank of India governor Shaktikanta Das on Wednesday announced a host of measures to ameliorate the impact of the second wave of the pandemic on the finances. For banks offering Covid loans, the top bank announced some relief measures.
Reserve Bank of India governor Shaktikanta Das on Wednesday announced immediate liquidity of ₹50,000 crore for a tenure of three years for banks to be able to extend Covid loans for all healthcare entities. This move is aimed at easing access to emergency healthcare services. "To boost the provision of immediate liquidity for ramping up immediate covid-related infrastructure and services in the country, an on-tap liquidity window of ₹50,000 crore at the repo rate is being opened for March 31, 2022," Das said.
Under this scheme, banks can provide fresh lending support to a wide-ranging of entities including vaccine manufacturers, importers and suppliers of vaccines and priority medical devices, hospitals and dispensaries, pathology labs, manufacturers and suppliers of oxygen and ventilators, and also patients for treatment, the governor said.
These loans will continue to be classified under the 'priority sector' till repayment or maturity, whichever is earlier. Banks may deliver these loans to borrowers directly or through intermediaries. Banks are expected to create a Covid loan book under this scheme. Such banks will be eligible to park their surplus liquidity up to the size of the Covid loan book under the reverse repo window at a rate 25 basis points lower than the repo rate.
For small business units, including unorganised sector units, the RBI announced a special, three-year, long-term repo operations of ₹10,000 crore. This facility will be available till October 31, 2021.
Reiterating the RBI's commitment to take swift-footed and calibrated measures to cushion the impact of the second wave of the pandemic, Das said the RBI will continue to monitor the situation and deploy resources. The Covid-19 situation has reversed from being on the foothills of strong economic recovery to facing a fresh crisis, which is still unfolding.
On the condition of the domestic market, Das said, "Consumption is holding up. Average daily electricity generation is up by 40 per cent year-on-year in April. Everyone now has learnt how to conduct businesses within restricted mobility," Das said.
