Reserve Bank of India Governor Shaktikanta Das on Wednesday announced ₹50,000 crore priority lending by banks for hospitals, oxygen suppliers, vaccine importers, COVID drugs and other COVID-related health infrastructure till March 31, 2022.
In an unscheduled address, the Governor said that the situation in the country has reversed from being on foothills of strong economic recovery to facing a fresh crisis.
Restoring livelihoods has become an imperative, he said. “We do not expect any broad deviation in our projections,” Mr. Das added.
He said that the RBI will continue to monitor the COVID-19 situation in the country, and will deploy all resources under it for the benefit of citizens, business entities, and institutions affected.
RBI Governor said that the normal monsoon forecast will help contain food price inflation. Mr. Das said that the IMD forecast of a normal monsoon is expected to sustain rural demand and overall output in 2021-22. It will also have a soothing impact on inflation pressures, he added.
The RBI Governor announced that an on tap liquidity of ₹50,000 crore will be made available for COVID-related healthcare needs. Banks are to treat this as priority sector lending, he said, adding that a COVID-19 loan book will be created by banks to this end.
The Governor said that RBI will conduct a special 3-year SLTRO of ₹10,000 crore at repo rate for small finance banks which will now lend upto ₹10 lakh per borrower. The SLTRO facility will be available till Oct 31, 2021, he added.
The RBI stands in battle readiness to ensure financial stability, Mr. Das said.
The news of the unscheduled speech was shared by the RBI from its official Twitter handle. The tweet provided no details on the agenda of the speech.
India has been registering record increase in COVID-19 cases in the past weeks, with the number of total infections crossing two crore.
Two days earlier, the Confederation of Indian Industry (CII), a prominent industry lobby group, had urged the government to implement a stringent lockdown to control the situation.