Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced much-needed relief for small and medium-sized financial organisations including NBFCs and MFIs, which have been struggling to operate in the wake of the Covid-19 pandemic.
RBI Governor said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic.
The central bank reduced the reverse repo rate – the rate at which banks park their fund with the central bank – by 25 basis points to 3.75 per cent. Reverse repo rate is the interest rate at which the RBI borrows funds from commercial banks.
Shaktikanta Das said the move was to encourage banks to “deploy surplus funds”. announced a range of money market operations, including a Rs 50,000-crore special finance facility for financial institutions.
“It has been decided to provide special refinance facilities for an amount of Rs 50,000 crores to National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), and National Housing Bank (NHB) to enable them to meet sectoral credit needs,” he said.
