Key Takeaways and Highlights Of RBI Governor Shaktikanta Das’ Speech

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.
The Reserve Bank of India (RBI) on May 5 announced several measures to protect small and medium businesses, individual borrowers from the adverse impact of the intense second wave of COVID-19 across the country.
It has also made provisions for banks to advance loans to businesses and restructure loans for enhancing liquidity in the system to help mitigate the crisis.
The RBI announced a Resolution Framework 2.0 for COVID-related stressed assets of individuals, small businesses and MSMEs and also expressed its resolve to do everything at its command to ‘save human lives and restore livelihoods through all means possible’.
Considering that the resurgence of COVID-19 pandemic in India has made individual borrowers, small businesses and MSMEs most vulnerable, the RBI has allowed borrowers i.e. individuals and small businesses and MSMEs having aggregate exposure of up to ₹25 crore, who have not availed restructuring under any of the earlier restructuring frameworks (including under the Resolution Framework 1.0 dated August 6, 2020), and who were classified as ‘Standard’ as on March 31, 2021, eligible to be considered under Resolution Framework 2.0.

Statement on Developmental and Regulatory Policies

Statement on Developmental and Regulatory Policies sets out various developmental and regulatory policy measures on (i) liquidity management and support to targeted sectors; (ii) regulation and supervision (iii) deepening financial markets; (iv) upgrading payment and settlement systems and (v) consumer protection.

FAQ’s – Targeted Long Term Repo Operations (TLTROs)

RBI issued Updated instructions on Targeted Long Term Repo Operations as on 26th October 2020

Statement on Developmental and Regulatory Policies

RBI has released the Statement on Developmental and Regulatory Policies as announced in Monetary Policy Review dt 9th Oct 20. The measures are intended to (i) enhance liquidity support for financial markets so as to revive activity in targeted sectors of the economy with linkages to other sectors; (ii) provide a boost to exports; (iii) regulatory support to improve the flow of credit to specific sectors within the ambit of the norms for credit discipline; (iv) deepen financial inclusion; and (v) facilitate ease of doing business by upgrading payment system services so as to improve customer satisfaction, while supporting growth.

Highlights of RBI Governor Das’ comments in an interview to Cogencis

In an hour-long interview to Cogencis, Das said even though there is an animated discussion on the subject of the central bank monetising the government’s budget deficit amidst the ongoing fight against COVID-19 pandemic, he has not taken a view on the issue.

RBI’s IInd Dose of Booster Measures to counter Indian Economy during COVID-19 crisis

On April 17th 2020 RBI Governor Shri Shakti Kanta Das announced the second series of measures to give boost to ailing economy by providing relief to various sectors and financial institutions including NBFC. The measures were aimed to (i) maintain adequate liquidity in the system and its constituents in the face of COVID-19 related dislocations; (ii) facilitate and incentivise bank credit flows; (iii) ease financial stress; and (iv) enable the normal functioning of markets.

Statement on Developmental and Regulatory Policies

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.

Seventh Bi-monthly Monetary Policy Statement, 2019-20 – Resolution of the Monetary Policy Committee (MPC) Reserve Bank of India

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.

Long Term Repo Operations (LTROs)

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