In the midst of the Corona crisis, the Reserve Bank of India’s (RBI) governor, Shaktikanta Das, has made several big announcements recently. His address did not have any fixed schedule in advance and RBI took this decision abruptly. In his address, Das stated that central banks are monitoring the overall situation. Considering the spread of the second wave of infection, a few extensive and quick steps were taken. Here are some of the big announcements made:
1. Demand will increase in rural areas: Das
Shaktikanta Das said that the monsoon is expected to be normal this year, which is expected to increase demand in rural areas. These are good signs for the economy. The economy seems to be recovering from the pressure. Apart from this, Das said that production activities are improving and RBI is constantly monitoring that the supply of essential products is not affected in any way.
2. 50,000 crore to banks for emergency health services: RBI Governor Shaktikanta Das said in his address that Rs 50,000 crore is being given for emergency healthcare. Under this, banks will provide loans to vaccine manufacturers, importers, pathology labs and patients for treatment at affordable interest rates. This facility will continue till 31 March next year. He said that major steps need to be taken to deal with the second and more dangerous wave of coronavirus infection.
3. Changes in KYC rules: The governor said that in view of the Corona crisis, the RBI has made changes in the rules of Know Your Customer (KYC). Now KYC can be done through video. In addition, the use of a limited KYC has been allowed until the end of this year.
4. Second phase of government securities purchase to begin on May 20: The RBI governor has announced a long-term repo operation for small finance banks (SFBs) of up to Rs 10,000 crore in his address. It will be used for loans up to Rs 10 lakh per borrower. They will get term facility till 31 March 2022. Shaktikanta Das also said that the second phase of the purchase of government securities worth Rs 35,000 crore will be started on May 20.
5. States will get concessions in overdrafts: Das said in his address that states have been given relief in overdraft facilities. States will get concessions in overdraft. The overdraft period has now been increased to 50 days for the states.
