Reserve Bank of India Governor Shaktikanta Das on Wednesday announced a Rs 50,000 crore lending programme to help ramp up the health infrastructure as India is battered by a second wave of the coronavirus pandemic.
The governor said that the RBI will inject liquidity worth Rs 50,000 crore, which will be available for banks to lend to entities like vaccine manufacturers, hospitals, other medical facilities and coronavirus patients. Under the provision, banks will maintain a “Covid loan book” and will be able to borrow money from the central bank at the existing repo rate of 4% for a term of three years. Banks will be able to avail this facility till March 31, 2022.
Das made the statement while announcing a number of decisions taken by the central bank aimed at boosting the health infrastructure and providing relief to small borrowers.
He added that the International Monetary Fund revised up global growth for 2021 “based on the assumption that vaccines would be available in advanced economies and some emerging market economies by summer of 2021, and in most other countries by the second half of 2022.”*
In an announcement aimed at individual borrowers and small businesses with loan exposure of up to Rs 25 crore, the RBI has decided to offer them another window to restructure the terms of their borrowings. However, this facility will be available to only those borrowers who did not avail the RBI’s loan restructuring scheme announced during the first wave of the pandemic.
Borrowers who have already restructured their loans in the first window can extend their moratorium period for a further two years, the RBI governor said.
Speaking on the impact of the second wave of the pandemic, Das noted that the disruption in manufacturing sector has been “minimal” and consumer demand has not been affected. He, however, added that the global economic outlook was “highly uncertain and clouded with downside risks”.
He said that the normal monsoon as predicted by the weather department would help in sustaining rural demand which has been a driver of growth in the country. The monsoon is also expected to have a “soothing effect” on food prices,he said, adding that the inflation trajectory would depend on coronavirus cases and local-level restrictions.
India on Wednesday registered 3,780 Covid-19 related deaths in the last 24 hours, its highest single-day rise in fatalities. With this, the toll climbed to 2,26,188 since the pandemic broke out in January 2020. India also reported 3,82,315 new coronavirus cases, taking the infection tally in the country to 2,06,65,148.
*Corrections and clarifications: The story has been updated to reflect that the RBI chief did not announce any form of vaccine rollout for India, and was misquoted by Centre-run media agencies.