The RBI today announced a second edition of liquidity to boost an economy by reducing the reverse repo by 25 basis points and taking it to 3.75 per cent from 4 per cent. The move has been taken in a view to encourage the banks to lend more.
RBI Governor Shaktikanta Das today announced a new version of targeted long term repos operations (TLTRO 2.0) of ₹50,000 crore to ensure that different sectors of financial institutions such as A microfinance institutions (MFIs) and non-banking financial companies (NBFCs) avail more liquidity. The RBI is open to increasing this amount beyond ₹50,000 crore, the governor said.
He has also announced relaxation in asset classification norms. Those accounts that have availed the moratorium facility, the period of moratorium will be excluded from the 90-day NPA classification norms of the RBI.
The above mentioned liquidity measures are in addition to the Rs 3.74 lakh liquidity boost announced in the last week of March which inluded TLTRO window of Rs one lakh crore for banks to invest specifically in corporate bonds and commercial papers. It also reduced the repo rate by 75 basis points and the reverse repo by a larger margin of 90 basis points, in a view to allow bank to maintain more money by themselves for lending purposes. The CRR has also been reduced by 100 BP.