Reserve Bank of India (RBI) announces a second wave of liquidity measures
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Reverse #repo is down 25 basis points to 3.75% – essentially discouraging banks to park money with the RBI. (Note: Repo rate remains unchanged since it cannot be tweaked without a MPC meeting)
• #WMA limit (temporary monetary relief by RBI to individual states) has been upped 60% over and above the one that was set on 31st March (75k cr to 1.2L cr to an additional ~68k cr TODAY)
• NABARD – National Bank for Agriculture and Rural Development, SIDBI(Small Industries Development Bank of India) and National Housing Bank offered refinance facility of 50k cr together at repo rate (mainly done to meet long-term funding requirements of agri & rural sector)
Some measures for the banking sector:
• #LCR requirement down from 100% to 80%. (basically means banks can now hold a lesser amount of “highly liquid assets”
• To preserve capital, banks CANNOT announce any #dividend payouts from profits for FY20.
• Banks now have 180 days to classify assets as #NPA (as against 90d earlier) – however, its only for those that avail the moratorium
“Eventually we shall cure, and we shall endure” – RBI Governor, even as he hinted that more measures are to come.
via – Anirudha Basak
