RBI announces new series of measures amid second Covid wave

The Reserve Bank of India (RBI) has announced the emergency liquidity support of Rs 500 billion, with a three-year window, for health services. The window will be open till March 2022 and is classified under priority sector lending until repayment or maturity. Banks can park an equal amount of such Covid loans with the RBI under the reverse repo rate, which would be 40 basis points higher than the reverse repo.

Small businesses and retail borrowers received special focus from the RBI in this latest round of Covid relief measures. The RBI announced the resolution framework 2.0 for loans with exposure of less than Rs 250 million that have not availed restructuring under the earlier framework and were classified as standard loans at the end of March 31. The RBI also announced targeted long-term repo operations for small finance banks of up to Rs 100 billion, for fresh lending of Rs 1 million per borrower.

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