The RBI has announced a slew of measures to help the economy tide over the Covid-19 crisis.
The economic impact of Covid-19 on the Indian financial sector and broader economy dominated the board meeting of the Reserve Bank of India (RBI) on June 26. The board also discussed the measures taken so far by both the central bank and the government.
There were expectations that the central board will discuss the emergency measures needed to be taken by the central bank, including a one-time loan restructuring facility for all loans affected by the Covid crisis. It is not clear whether this was discussed at the meeting.
According to banking industry officials, the central bank is likely to announce a one-time restructuring facility for loans affected by the Covid-19 lockdown. The board doesn't necessarily discuss the specifics of the actions to be taken by the RBI but only takes a macro view of the prevailing situation. It is up to the RBI top management to decide the course of actions in consultation with the government.
Union finance minister Nirmala Sitharaman recently said the government will discuss the RBI the feasibility of a one-time restructuring facility for stressed assets linked to the Covid crisis.
The RBI has announced a slew of measures to help the economy tide over the Covid-19 crisis. These include a six month moratorium for all term loans, special liquidity facilities, targeted long term repo operations among other measures. It also announced significant cut in key lending rate to enable banks lend to end borrowers at a cheaper rate.
The RBI board met through a videoconference under the chairmanship of governor Shaktikanta Das and was participated by deputy governors B.P. Kanungo, Mahesh Kumar Jain and Michael Debabrata Patra.
Other directors of the Central Board – N. Chandrasekaran, Ashok Gulati, Manish Sabharwal, Prasanna Kumar Mohanty, Dilip S. Shanghvi, Satish K. Marathe, Revathy Iyer, and Sachin Chaturvedi too attended the meeting.
Tarun Bajaj, Secretary, Department of Economic Affairs and Shri Debasish Panda, Secretary, Department of Financial Services also attended.
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