Comments
The Reserve Bank of India’s efforts to ensure availability of liquidity, especially for the stressed sectors, is commendable, according to Thomas John Muthoot, Chairman, Confederation of Indian Industry (CII), Kerala State Council, and Chairman and Managing Director, Muthoot Fincorp.
The launch of the TLTRO 2.0 (Targeted Longer-Term Repo Operations) is expected to ensure that microfinance institutions and small and mid-sized non-banking finance companies remain well-lubricated in the present scenario of financial stress brought about by the Covid-19 outbreak.
Provision of enhanced refinancing facility to institutions such as National Ban for Agriculture and Rural Development, Small Industries Development Bank of India, and National Housing Bank is expected to ensure adequate flow of credit to the productive sectors of the economy.
The move to pare the reverse repo rate by 25 bps to 3.75 per cent under the LAF (Liquidity Adjustment Facility) is expected to discourage banks from parking their excess funds with the central bank. It can be hoped that when the Monetary Policy Committee meets, the repo rate would also be reduced.
Muthoot said that the CII is encouraged by the cautious optimism provided by the RBI Governor when he said that though the macro-economic landscape has deteriorated severely in some areas, India is still among the handful of countries projecting positive growth.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.