*Key highlights from RBI press meet*
RBI is monitoring the situation very closely and has been and *will continue to make changes as and when required*
_Key steps taken_
_A) to provode adequate liquidity in system_
Development of funds has been to large corporates and PSU entities, but impact has been more on small corporates. *Thus undertake TLTRO 2.0, for an INR500bn ( to begin with)* the funds will be invested in NBFCs with 50% to the mid sized, small sized NBFCs and MFI - this has to be done within 1 month of availmemt - this will be under HTM for banks
refiance through NBARD, SIDBI and NHB - *to proved special refiance for INR500bn to enable them to meet sectoral credit needs ( NABARD - INR250bn, SIDBI - INR150bn and balance to INR100bn)* - additional requirement if any by them may be met by RBI. The advances will be charged at repo rate.
LAF , the bank is sitting on higher liquidity ( on April 15th RBI absorbed INR6.9tn) , thus *reverse repo is further reduced to 25bps to 3.75%* other policy rates remains same
the WMA limit has been increased for states by 60% to plan there market borrowing program better over period of time. This will be available till September 2020.
_B) To facilitate bank credit_
_regulatory measures to reduce financial stress_
asset classification- *90 day classification will exclude the moratorium period* . The bank will.have to *maintain additional 10% provisions on these standstill accounts over next 2 quarters* these provisions can later be adjusted against the provision requirement for slippage requirement.
extention of resolution timeline- in case of large accounts under default an additional provision of 20% required if not completed in 210 days, recognition the challenges further 90dyas has been added for resolution
divided - *the SCB shall not make any dividend payout for FY20,- this will be reviewed in Q2Fy21*
for LCR - *it has been lowered to 80% from 100% from immediate effect* - this will be ramped up in phased manner 1st october 2020 90% and 100% by FY22
NBFC loans to CRE projects *extend 1 year moratorium without change in classification* - this will benefit both NBFC and real estate segment
_Other highlights_
Payment infrastructure is running efficiently/seamlessly, there is no downtime on internet banking etc.
Forex reserves stands at USD476.8bn
undertook 3 LTROs and one more will be done today of INR250bn
First cut view- These are second such strong measures taken by RBi addressing most of the industry concerns especially on NBFCs ( those were struggling with liquidity) also real estate segment.
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