Small non-banking finance companies continued to be shunned by banks, which availed only half of the Rs 25,000-crore refinance offered by the RBI for lending to NBFCs. This was despite the RBI’s attempt to improve the market for long-term bonds.
Sri Lanka is set to enter into an agreement with the Reserve Bank of India for a currency swap worth $400 million to boost the foreign reserves and ensure the financial stability of the country which is badly hit by the COVID-19 pandemic, a top minister has said. Cabinet approved the proposal, enabling RBI to meet short-term international liquidity requirements.
The HC has granted Indiabulls, a non-banking financial company (NBFC), the permission to not pay its debenture holders, including fund houses, interest and principal as long as the RBI allows banks and NBFCs to offer moratorium to their borrowers. Fund managers now fear that other NBFCs may take the same route and not pay MFs for the next few weeks.
The Reserve Bank of India has a number of policy options to draw upon to cushion the economic blow from the coronavirus pandemic. With a limited fiscal response so far, the RBI has provided some virus relief to the economy but analysts say these areas need to be addressed further like rate cuts, deficit financing, bond purchases, corporate debt and looser rules.
Finance minister Nirmala Sitharaman on Friday 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, as part of the second stimulus package to deal with the impact of COVID-19 pandemic. The first stimulus package was announced on March 27.
PM Narendra Modi said that the RBI’s announcements “will greatly enhance liquidity and improve credit supply” in the system. PM Modi tweeted — “Today’s announcements by @RBI will greatly enhance liquidity and improve credit supply. These steps would help our small businesses, MSMEs, farmers and the poor. It will also help all states by increasing WMA limits.”
Reserve Bank of India (RBI) governor Shaktikanta Das on Friday addressed the media via video conferencing to announce measures to support economy during the ongoing coronavirus crisis. The RBI chief unveiled a slew of measures which included reduction in reverse repo rate and liquidity support for financial institutions, among others.
RBI governor Shaktikanta Das addressed the media amid the ongoing coronavirus crisis. Under liquidity adjustment facility (LAF), reverse repo rate (rate at which RBI borrows funds from banks) reduced by 25 basis points to 3.75%; repo rate unchanged (4.40%) as the decision is taken by the Monetary Policy Committee, Das announced.
The RBI has restricted operating hours for all the markets that it regulates from 10am to 2pm until April 17. The shorter hours will not impact retail bank customers as all their regular banking services — including Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT) and e-Kuber facilities — will continue to be available according to extant timings.
The revised market timings will be effective during April 7-17, 2020, the central bank said in a circular on Friday. The market will open at 10 am instead of the current 9 am and closing timings too have been revised to 2 pm for all segments. The lockdown has adversely impacted the functioning of financial markets, the RBI said.
The Reserve Bank of India on Wednesday announced more measures to counter the economic fallout of the fast-spreading coronavirus pandemic. In a notification, the central bank mentioned that it has extended the realisation period of export proceeds, increased WMA (Way and Means Advances) limit and implemented countercyclical capital buffer.
The Finance Ministry and RBI will hold a meeting on Tuesday to decide on the government’s borrowing plan for the first half of 2020-21 amid the lockdown to contain the spread of coronavirus. According to sources, the government would resort to front-load it’s borrowing plan to deal with the challenges posed by COVID-19 on the economy.
Amid stress in the financial system due to COVID-19, the Reserve Bank of India (RBI) on Friday announced measures to inject Rs 3.74 lakh crore into the banking system through a slew of instruments, including the reduction in cash reserve ratio. The other liquidity support measures included targeted long-term repo operation (TLTRO) and increasing the limit under the marginal standing facility (MSF) to 3 per cent from 2 per cent.
The RBI will inject liquidity of Rs 30,000 crore through open market operations next week to maintain financial stability in the system in the wake of the coronavirus outbreak. The RBI has decided to conduct purchase of government securities under open market operations (OMOs) for an aggregate amount of Rs 30,000 crore in two tranches of Rs 15K crore each.
Relief to coronavirus-hit borrowers from being classified as defaulters and additional funding to help businesses tackle a shutdown are measures that lenders want the regulator to allow to help tide over the pandemic-triggered economic shock. The Indian Banks Association (IBA) has also created a working group to study the economic fallout of the coronavirus pandemic.
The Reserve Bank of India (RBI) will buy bonds on the open market for a total of Rs 10,000 crore ($1.35 billion) on Friday to try to keep all market segments liquid and stable, the central bank said on Wednesday. Spreads between government bonds and corporate bonds have risen in recent days because of the extreme risk aversion that has led investors to dump all assets including Indian bonds.