New Delhi: Taking cognizance of the importance of having a sound Covid-related infrastructure amid the ongoing Pandemic, Reserve Bank of India (RBI) today announced a “Term Liquidity facility” of Rs 50,000 crore to ease access to emergency health services. To boost provision of immediate liquidity for ramping up COVID related healthcare infrastructure and services in the country, RBI Governor Shaktikanta Das on Wednesday announced an on-tap liquidity window of Rs 50,000 crore with tenors of up to three years at the repo rate is being opened till March 31, 2022.
Under the scheme announced by RBI, banks can provide fresh lending support to a wide range of entities including
- Vaccine manufactures.
- Importers or suppliers of vaccines and priority medical devices.
- Hospitals or dispensaries.
- Pathology labs.
- Manufactures and suppliers of oxygen and ventilators.
- Importers of vaccines and COVID related drugs.
- Logistics firms and also patients for treatment.
“In the fight against the second wave, alleviating any constraint from the financing side for all stake holders – government, hospitals and dispensaries, pharmacies, vaccine or medicine manufacturers or importers, medical oxygen manufacturers/suppliers, private operators engaged in the critical healthcare supply chain, and above all the common man who may be facing sudden spike in health expenditure – requires a comprehensive targeted policy response,” RBI Governor Das said.
Under the scheme, banks are being incentivised for quick delivery of credit through extension of priority sector classification to such lending up to March 31, 2022. These loans will continue to be classified under priority sector till repayment or maturity, whichever is earlier.
Banks may deliver these loans to borrowers directly or through intermediary financial entities regulated by the RBI. Banks are expected to create a COVID loan book under the scheme. By way of an additional incentive, such banks will be eligible to park their surplus liquidity up to the size of the COVID loan book with the RBI under the reverse repo window at a rate which is 25 bps lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate.
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