RBI enhances liquidity pool
The Reserve Bank of India (RBI) on Tuesday advanced its Rs 25,000 crore variable rate repo auction to March 26 from March 30 on a review of the rapidly evolving financial conditions and taking into account the impact of disruptions caused by Covid-19.
Dr. Niranjan Hiranandani, National President – NAREDCO said, “RBI’s move to have priority sector lending to NBFC sector will resolve the liquidity in some form – this will provide relief to SME’s who were largely dependent on NBFCs. RBI’s immediate economic intervention is seeked without any further delay. Having said that, the menace of this pandemic has particularly hit at a very sensitive time since its Financial Year closing hence a fiscal the stimulus was required to cope up in this current scenario. India Inc will continuously seek economic intervention from the Government like suspending Bankruptcy Law for a few months, rescheduling loan repayments, a one-time rollover for debt-restructuring to salvage the economic challenges for real estate companies.” Mr. Rohit Poddar, Managing Director, Poddar Housing and Development Ltd said, “Considering the current situation of the country and its economy, RBI has tried to address the issues of the sector with this unconventional measure to infuse liquidity in the system. Variable repo rate auctions for Rs. 1,00,000 crore will enable the RBI to have better control on the liquidity situation in the economy. It is crucial to monitor the changing financial market conditions which will help in administering any need of additional liquidity support required to ensure normal functioning of the bank. This move definitely comes as a ray of hope for MSMEs and housing finance companies amidst the ongoing mayhem of COVID 19. However, a further repo rate cut will ensure more liquidity into the system that will in-turn support the economy during COVID-19”
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