RBI Governor Shaktikanta Das Highlights: Reserve Bank of India Governor Shaktikanta Das today brought in a slew of measures to provide liquidity, facilitate bank credit, enable normal functioning of the markets, and ease financial stress to an economy struggling against the deadly coronavirus. Among the emergency measures today, RBI cut the reverse repo rate by 25 basis points to 3.75%, while keeping the repo rate unchanged, discouraging banks from parking more money with the central bank. Further, RBI will also pump in lakhs of crores of rupees into the system, by giving money to financial institutions, allowing more borrowing, and letting states get more money. Shaktikanta Das announced Rs 50,000 crore special finance facility to be provided to NABARD (Rs 25,000 crore), SIDBI (Rs 15,000 crore), and NHB (Rs 10,000 crore). He said that the surplus capital will help to refinance the commercial banks and housing finance banks to infuse liquidity into the market. In another major announcement, loans given by NBFCs to real estate companies will be given similar benefits as given by scheduled commercial banks. To benefit NBFCs and micro-financial institutions, the RBI said it will conduct targeted long-term repo operations (TLTRO) 2.0 worth Rs 50,000 crore, which can be further increased. To empower states for adequate borrowing, the RBI has also increased WMA limits by 60 per cent, to plan their market borrowings better. This facility will be available till September 30. The RBI has also asked all banks to not make any dividend payments to shareholders due to the ongoing financial challenges. The Reserve Bank has brought down the LCR (Liquidity Coverage Ratio) requirement of banks to 80% from 100%, giving more liquidity to banks. Earlier, last month, the RBI cut the repo rate by a massive 75 basis points, while Finance Minister Nirmala Sitharaman had announced a mega economic relief package worth about Rs 1.7 lakh crore.
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