This is an unconventional monetary policy tool. It involves printing money and distributing it to the public. Milton Friedman coined this term. It basically denotes a helicopter dropping money from the sky. Friedman used the term to signify “unexpectedly dumping money onto a struggling economy with the intention to shock it out of a deep slump”.
The Reserve Bank of India (RBI) has announced further measures, including extending the time for realisation and repatriation of proceeds for exports made up to or on July 31, 2020 to 15 months from the date of export against nine months earlier, while upping the temporary accommodation it provides to States and Union Territories to deal with the COVID-19 pandemic. The central bank also said it is not activating the counter cyclical capital buffer for banks.
RBI has issued directions to all the financing agencies including all Banks, Financial Institutions, NBFC’s & Cooperative Banks etc under COVIC-19 Regulatory Package.
RBI released the statement on Development and Regulatory Policies alongwith the 7th Bi-Monthly Policy review on 27th March 2020.This Statement sets out various developmental and regulatory policies that directly address the stress in financial conditions caused by COVID-19. They consist of: (i) expanding liquidity in the system sizeably to ensure that financial markets and institutions are able to function normally in the face of COVID-related dislocations; (ii) reinforcing monetary transmission so that bank credit flows on easier terms are sustained to those who have been affected by the pandemic; (iii) easing financial stress caused by COVID-19 disruptions by relaxing repayment pressures and improving access to working capital; and (iv) improving the functioning of markets in view of the high volatility experienced with the onset and spread of the pandemic. The policy initiatives in this section should be read in conjunction with the MPC’s decision on monetary policy actions and stance in its resolution.
A day after Modi govt began its economy rescue in right earnest with a Rs 1.70 lakh crore coronavirus counter, the Reserve Bank of India joined the big fight today with a host of measures aimed at minimising the damage from Covid-19.
These measures come just hours after Moody’s Investors Service cut India’s growth forecasts for 2020 calendar year to 2.5% from 5.3%. The MPC decided by 4-2 majority to reduce repo rate by 75 basis points to 4.4 per cent. The reverse repo rate was cut by 90 bps to 4 per cent, creating an asymmetrical corridor.
The Reserve Bank of India (RBI) has decided to align its financial year with the Government.
Reserve Bank of India (RBI) today announced a draft revival plan for the beleaguered Yes Bank, in which it has been proposed that SBI can invest in the reconstructed bank for up to 49 per cent stake for nearly Rs 2,450 crore. The central bank has invited suggestions from public on the draft scheme till Monday, after which a final call will be taken.
RBI allowed the banks to deduct the equivalent amount of incremental credit disbursed by them as retail loans to automobiles, residential housing, and loans to micro, small and medium enterprises (MSMEs), over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their net demand and time liabilities (NDTL) for maintenance of the cash reserve ratio (CRR).
RBI allows RRBs to act as merchant acquiring banks using Aadhaar Pay – BHIM app and POS terminals.
RBI has announced conduct of LTRO’s for one-year and three-year tenors for up to a total amount of ₹ 1,00,000 crores at the policy repo rate wef 17th February 2020