Various measures to improve the flow of credit – EzAnime.net

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In order to increase the focus of liquidity measures in the reactivation of activity in specific sectors, the RBI has extended the long-term repurchase operations (TLTRO) scheme for six months until September 30, 2021.

Por Ankur Mishra

The Reserve Bank of India (RBI) announced on Wednesday a series of measures to improve the flow of credit in the system. The measures include Rs 50 billion liquidity support for new loans during FY22 to all Indian Financial Institutions (AIFI) such as Nabard, Sidbi, NHB and Exim Bank.

Apart from this, the regulator has increased the loan limit for individual farmers to Rs 75 lakh from Rs 50 lakh against the promise of agricultural products. The RBI has also extended the Priority Sector Loan (PSL) qualification benefit for loans from banks to non-bank financial corporations (NBFC) by six months.

“This waiver, which was available from August 13, 2019 to March 31, 2021, will be extended for another six months, until September 30, 2021,” the RBI said. In August 2019, the RBI had decided that the bank credit to NBFCs registered for re-loan would be considered a priority sector loan.

In order to increase the focus of liquidity measures in the reactivation of activity in specific sectors, the RBI has extended the long-term repurchase operations (TLTRO) scheme for six months until September 30, 2021.

Raj Kiran Rai G, Chairman of the Association of Banks of India and Chief Executive Officer and Chief Executive Officer of Union Bank of India, said the extension of the available TLTRO scheme and additional financing to AIFIs would help provide resources for needy segments of the economy.

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SS Mallikarjun Rao, MD and CEO of Punjab National Bank, said: “While liquidity has been secured through TLTRO in case demand picks up, the opportunity to lend through NBFC, loan cap improvement against deposit receipts, ease of liquidity for AIFI are all good measures to ensure continued availability of credit that help a faster economic recovery.

Anil Gupta, Vice President of Financial Sector Ratings, ICRA, said the extension of the PSL scheme is positive and will further enhance the flow of credit to NBFC and HFC to make loans to identified sectors. “NBFCs and HFCs have benefited from accessing new lines of financing at competitive rates while allowing banks to meet their PSL requirements with a better risk-return perspective,” said Gupta.

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