Liquidity for health

1 min read . Updated: 06 May 2021, 12:10 AM IST Livemint

A notable move by RBI was its opening of a liquidity window of ₹50,000 crore, with tenors of up to three years at its repo rate of 4%, to boost the supply of bank credit to the healthcare sector

Reserve Bank of India (RBI) governor Shaktikanta Das took the country by surprise on Wednesday by announcing a slew of measures to support the economy amid the second wave of covid. As part of this, a debt restructuring option for small borrowers has been extended. This will offer them relief, though debtors in general may have been disappointed that another debt repayment moratorium wasn’t announced. RBI also offered liquidity support to small businesses and made other moves that look designed to mitigate covid’s disruptive impact on an economic recovery expected this year. Das also indicated that a close watch was being kept on the situation.

A notable move by RBI was its opening of a liquidity window of ₹50,000 crore, with tenors of up to three years at its repo rate of 4%, to boost the supply of bank credit to the healthcare sector. This is welcome, given how badly overstretched this sector is and our need to massively expand health services. Its benefits won’t be felt overnight, but cheap loans could help. Right now, though, what constrains our fight against covid is not finance, but everything else that goes into it. It’s about management more than money.