In a bid to infuse liquidity into the system and accelerate the economy reeling under the Covid-19 crisis, the Reserve Bank of India (RBI) today announced several measures which, besides easing the liquidity concern of banks, NBFCs and other financial intermediaries, will also give a boost to the real estate sector. The announcement of TLRTO 2 directed towards the NBFC sector is a much need initiative given the Covid related moratorium optionality that this sector had to offer its borrowers. So, with time, more reforms, guidelines and measures can be expected from RBI as the extent of systemic challenges become more visible - Naveen Kulkarni, Chief Investment Officer, Axis securities, Even after the lockdown ceases, the RBI may have to continue extending its support to the banking system in the form of macro-prudential measures. This move will positively impact NBFCs and real estate. Hopefully, this will further give borrowers and lenders breathing space to stablise from the unexpected financial and psychological jolt out of this pandemic. COVID-19 Pandemic has crippled the global economy. Non-banks with limited incremental funding options were facing increasing risks of default. However, these accounts will attract 10 percent provision which will block Bank’s capital against existing credit and hence, will not be available for new credit. Some of the liquidity and asset classification measures should help the large housing finance companies, as they have large diversified books. India’s Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das is set to announce its bi-monthly policy today, at a time when the country is in a technical recession and is also facing inflationary pressures. Given the optimism around economy coming back in phases and the support being extended through emergency COVID loans and other lines of credit, this will help all sectors , especially MSME and Retail. - Raghvendra Nath, MD, Ladderup Wealth Management, After announcing several relief measures in his previous address recently, to counter the economic slowdown, these new measures announced today will definitely bring adequate liquidity in system, facilitate bank credit flow, ease financial stress & help India emerge as a leader in a post-COVID-19 world. It is being believed that the Governor will make an important announcement in this conference. The measures taken for liquidity support to NBFCs, HFCs and MFIs will meaningfully help the cause of the real estate sector. The RBI on Friday allowed non-bank financial companies to extend the date for commencement of commercial operations (DCCO) for loans given to commercial real estate by additional one year without considering it as restructuring. RBI monetary policy LIVE: The Monetary Policy Committee (MPC) of the Reserve Bank of India on Friday decided to keep repo rate unchanged at 4 per cent. 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. The retail inflation for March fell to a four-month low of 5.91 per cent on cheaper food articles. The impact of Covid-19 is not captured in index of industrial production (IIP) data for February, he said, adding that contraction in exports in March at 34.6 per cent was much more severe than global financial crisis of 2008-09. Reactions to RBI announcements | Dhiraj Relli, MD & CEO, HDFC Securities said the RBI 's efforts are three pronged.- Push Banks to do more lending (by cutting reverse repo rate), providing more liquidity to them (higher TLTRO-2 funds, special refinance facility of Rs.15000 cr to SIDBI and prescribing lower liquidity coverage ratio) and prescribing some reliefs and some fresh moves to create provisions against slippages.- Provide more credit to NBFCs (especially smaller ones) by prescribing that atleast 50% of funds under TLTRO-2 must be on lend to such entities. 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). Banks would also get relaxation on Special mentioned a/c, which are unpaid with 60-90 days as on March, but have to make 10 percent provisioning against such standstill accounts: Sundar Sanmukhani, Head of Fundamental research desk at Choice Broking, RBI's Targeted Long Term Repo Operations: All your questions on TLTRO answered. Reserve Bank of India (RBI) Governor Shaktikanta Das will address the media at 10:00 AM today. The move on reduction of reverse repo rate by 25 basis points shall push banks to open up the credit flow to economic activities. In an effort to strengthen the financial system of the country’s financial institutions, the Reserve Bank of India (RBI) on Friday decided to freeze dividend payments by banks for the financial year 2019-20. is a welcome relief to HFCs and NBFCs. It maintained the status quo on the benchmark lending rates in view of persistently high inflation and a lower-than-expected contraction of the economy. Copyright © e-Eighteen.com Ltd. All rights reserved. - Rajesh Gupta, Co-Founder & Director, BUSY Infotech. The measures though significant were not substantial enough as a mere Rs 50,000 crore in the form of TLTRO is rather conservative. He said vehicle production and sales declined sharply in March and so did electricity consumption. Here is the full speech of RBI Governor Shaktikanta Das: "In view of the COVID-19 pandemic, the Monetary Policy Committee (MPC) decided to advance its meeting scheduled for 31st March, 1st and 3rd April 2020. Similarly, allowing a 90 day extension for asset classification to loans that have been granted moratorium window is a critical step to assuage credit quality concern of lenders. We could see a reduction in bank deposit rates too in the coming weeks. # Highlights of RBI Governor Shaktikanta Das Speec # RBI governor # rbi new repo rate # rbi reverse repo rate # Shaktikanta Das Press Conference # Shaktikanta Das Live Update # Shaktikanta Das # RBI # Press Conference # Reserve Bank of India # Media Address # 10am # … 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. RBI Governor Shaktikanta Das (Express photo by Tashi Tobgyal) Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said that the Indian economy has exhibited a stronger-than-expected rebound over the past few months but added that institutions need to be watchful of demand sustainability after the festive season. “It has been decided that in respect of all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall exclude the moratorium period, that is, there would an asset classification standstill for all such accounts from March 1, 2020 to May 31, 2020,” RBI Governor said. “Among the various measures announced, commendably its allotment of Rs 10,000 crore to National Housing Bank, is a big move for the real estate sector reeling under the liquidity crisis. India is expected to post a sharp turnaround and resume its pre-COVID pre-slowdown trajectory by growing at 7.4 per cent in 2021-22," RBI Governor Shaktikanta Das said. Read latest news and live updates on Rbi-governor including breaking news on Rbi-governor,Rbi-governor photos,Rbi-governor videos and many more at cnbctv18.com. Following are the points made in the speech:Inflation to remain elevated with some relief in winter months. 2020The Indian Express [P] Ltd. All Rights Reserved, RBI Governor Highlights Shaktikanta Das cuts reverse repo pumps in money liquidity eases rules for banks NBFCs, Centre releases 6th installment of Rs 6,000 crore to states to meet GST compensation shortfall, Centre releases Rs 6,195 crore to 14 states as instalment of post devolution revenue deficit grant, Annual budgetary support of Rs 2,500 cr needed to support cashless payments via BHIM-UPI: Report, Sun Pharmaceutical Industries Share Price, This website follows the DNPA’s code of conduct. Pointing out that the Reserve Bank of India (RBI) is monitoring all macro parameters on a continuous basis, he said, economic activity has come to standstill during lockdown. Banks to maintain higher provisions of 10% on standstill accounts, NBFCs, HFCs, NBFC-MFIs now allowed to operate, RBI Press Conference LIVE | From the perspective of regulatory norms to spur an economic revival, the measures announced aim to maintain adequate liquidity in the system, facilitate bank credit flow and ease financial stress. RBI Governor today said that the quality and ingenuity of technology should match the banking sectors aspirations of acquiring scale and diversion of business across the globe. RBI governor Shaktikanta Das delivered the keynote address at the 13th Mint Annual Banking Conclave.Das said the slowing down of credit off-take is the biggest challenge for banks everywhere - Hakim Lakdawala, Group Promoter, Goodwill Developers, The liquidity provisions made by RBI through Rs 50,000 TLTRO deployment will enable HFCs and NBFcs to raise financing through bonds, commercial papers etc. This will also pacify the concerns related to likely increase in bond supply issues from the state government. Overall, the current measures are in continuation of measures taken so far. Banks will need to do a balancing act between extending moratorium and providing new credit due to this provisioning requirement: Sanjay Doshi, Leader – Financial Services Advisory, KPMG in India, Reactions to RBI announcements | RBI’s latest announcements to infuse liquidity and expand bank credit are expected to provide big relief to the NFBC sector as 50 percent of the proposed TLTRO worth Rs 50,000 crore will be invested in small and mid-sized NBFCs and MFIs. The press conference is important amid the going situation the country. On the one side, it will definitely increase the liquidity in the market during this pandemic, but the government should also provide some relief on taxation front which is also important to make businesses sustainable for the long run in the market. This relief is now also allowed for NBFCs. The 25 bps cut in reverse repo would help bring down the short term rates by 25-50 bps as the banking system continues to be in surplus liquidity mode. 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