Chennai: Indian Bank MD and CEO Ms Padmaja Chunduru has said the tone of RBI was of empathy and support to needy sectors.
”The TLTRO focused on mid size NBFCs and MFIs is positive”, she said, according to an Indian Bank release here.
She said the 90 day extension in NPA reckoning for stressed standard assets as on March one effectively postpones NPA classification for accounts that were slipping to NPA between March and May.
”Given the optimism around economy coming back in phases and the support being extended through emergency COVID loans and other lines of credit, this will help all sectors, especially MSME and retail”, she added.
Padmaja said the 90 day deferment given for NCLT filing will help banks, if it could be taken as saving on 20 per cent additional provision in these cases.
TVS Motor Company Chairman Venu Srinivasan strongly supported the measures announced by the RBI to support the economy in this period.
”It is a sign of their continued efforts to stimulate economic activity and protect jobs”, he said, according to a release.
The LTRO for NBFCs and micro-lenders is a good tool to ease liquidity without tinkering with policy rates and Rs 50,000 crore is a substantial amount. This should, restore confidence especially among the MSME sector which provides a significant portion of the country’s jobs and is integral to all supply chains, he added.
”That coupled with a cut in the reverse repo rate will incentivise banks to actively lend to those most in need of funds and make it affordable for businesses to borrow, address their working capital needs and get back into action as the country opens”, he said.
Anshuman Magazine, Chairman and CEO-India, South East Asia, Middle East Africa, CBRE, said the RBI’s liquidity measures were a clear step towards encouraging liquidity in the banking system, preserving financial stability and supporting overall economic growth.
”In the wake of the evolving Covid-19 situation; the announcement in the reverse repo rate cut from 4 per cent to 3.75 percent should further push banks to lend to the productive sectors of the economy”, he said.
In a release here, he said in addition to this, RBI has also announced that loans given by NBFCs to real estate companies to get similar benefit as given by scheduled commercial banks.
Announcement of refinancing facility for leading financial institutions such as NABARD and SIDBI, relaxation of stressed asset classification and resolution norms and provision of another window of Targeted Long Term Repo Operations to the tune of Rs 50,000 crore will provide additional fiscal stimulus to the economy, he said.
To further ease flow of funds to the housing sector, the National Housing Bank has also been provided with a refinance facility of Rs 10,000 crore for Housing Finance Companies as additional liquidity for individual housing loans, which is a much needed boost at this time, he said.