Covid-19: RBI Governor, bankers discuss credit flows to different sectors

Shaktikanta Das, along with RBI deputy governors and top bankers reviewed the current economic situation and post-lockdown credit flows, including provision of working capital, with special focus on credit flows to MSMEs.

RBI Governor Shaktikanta Das (Photo: Mint)
RBI Governor Shaktikanta Das


The Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday met heads of public and private sector banks to discuss credit flows to different sectors, including financial institutions and mutual funds, and took stock of the recent announcements made by the central bank to help businesses tide over the covid-19 crisis.
Over a video conference, Das, along with RBI deputy governors and top bankers reviewed the current economic situation and post-lockdown credit flows, including provision of working capital, with special focus on credit flows to MSMEs.
Micro small and medium entertainment (MSME) sector, which employs millions of people, have been worst hit by the nationwide lockdown that led to closure of businesses. The union government is likely to soon announce relief measures for the beleaguered sector.
An official statement said that credit flows to liquidity to non banking financial companies (NBFCs), microfinance institutions (MFIs), housing finance companies (HFCs) were also discussed.
Das also took stock of some of recently announced measures announced by the central bank. The implementation of the three-month moratorium on repayment of loan instalments was looked at.
The development comes in the backdrop of the Supreme Court asking the central bank to ensure that every borrower gets the moratorium benefit. In March, the RBI allowed banks, non-banking financial companies (including housing finance companies) and other financial institutions to allow a three-month moratorium on payment of installments on term loans that are due for payment between March 1 and May 31.
"Monitoring of overseas branches of banks in view of the slowdown in economies across the globe (was also discussed)," the RBI said.
Since the imposition of the nationwide lockdown starting March 25, the RBI has taken slew of measures to improve credit supply, and support businesses, middle class, and the poor hit by covid-19. In March, it cut the repo rate by 75 basis points to 4.4% with immediate effect and announced several measures to inject 3.74 trillion liquidity into the system. Last month, RBI cut the reverse repo rate, provided special liquidity support to NBFCs and microfinance companies, eased asset classification norms, and facilitated increased emergency funding for state governments.


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