RBI Extends More Credit For Contact Intensive sectors, Hospitality, Tourism

RBI in its bi-monthly MPC statement today announced an on tap special liquidity window of Rs. 15,000 crore for contact intensive sectors. "In order to mitigate the adverse impact of the second COVID-19 wave on contact intensive sectors, a separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022, with tenors of up to three years at the repo rate," said RBI Governor Shaktikanta Das.

As part of the facility, banks can extend loan of 3-year tenure to sectors including hospitality, bus operators, tourism, salons and aviation ancillary services. "By way of an incentive, banks will be permitted to park their surplus liquidity up to the size of the loan book created under this scheme with the Reserve Bank under the reverse repo window at a rate which is 25 bps lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate," Das said

Additionally, the RBI governor extended liquidity facility of Rs. 16,000 crore to SIDBI for supporting MSMEs.

Meanwhile, in line with the consensus estimates, RBI has kept the policy rate unchanged for the sixth consecutive time. Last time, the RBI in an off-policy meet on May 22, 2020 slashed the key policy rate to a historic low in a bid to boost up demand.

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