Tuesday, 9 August, 2022
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‘Future is bright’: RBI opens Rs 50,000-cr funds tap for vaccine makers, hospitals, healthcare

RBI Governor Shaktikanta Das says second Covid wave is not insurmountable, immediate priority is to protect lives and livelihoods, central bank will remain proactive.

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New Delhi: With India’s healthcare infrastructure crumbling from the onslaught of the Covid-19 pandemic, the Reserve Bank of India Wednesday announced a slew of measures to improve funding access to vaccine manufacturers and hospitals and provide relief to individual borrowers and small firms.

The central bank also sought to assure all stakeholders that it will remain proactive and take necessary steps to protect lives and livelihoods. The impact of the second wave on the economy appears “minimal” as now, with aggregate demand and consumption holding up, RBI Governor Shaktikanta Das said in a video conference Wednesday.

Das announced Rs 50,000 crore on tap liquidity window using which banks can lend to vaccine manufacturers, importers and suppliers of vaccine and priority medical devices, hospitals and dispensaries, pathology labs, manufacturers and suppliers of oxygen and ventilators, importers of vaccine and Covid-related drugs, logistics firms and also patients for treatment.

The window, which will remain open till 31 March 2022, will have a three-year loan tenor with the funds available to banks at the repo rate. These loans have been categorised as priority sector lending to incentivise banks to lend.

This ‘Covid loan book’ will also help banks get better interest rates from the RBI for its surplus liquidity.

The measures could provide a boost to vaccine manufacturers like Serum Institute of India, Bharat Biotech and Dr Reddy’s and help them expand capacity to step up production to meet India’s demand to vaccinate its population. At the same time, it could help healthcare providers in ramping up capacity to handle the second wave.

Also read: India is opening up Covid vaccination. It’s time to shirk hesitancy & disregard price concerns

Relief to individual borrowers and MSMEs

The RBI has also extended the loan restructuring framework for small individuals and firms who were not stressed by the first wave but now find themselves under stress in the second wave.

Individuals and small businesses with a loan exposure of Rs 25 crore and who were classified as standard accounts as of 31 March 2021 can have their loans restructured.

For those individuals and MSMEs who availed of the restructuring framework last year, banks are being allowed to extend the moratorium period upto a total of two years. Banks have also been allowed to extend working capital help to MSMEs by again reviewing their requirements in the face of the second wave.

The RBI has also relaxed the ‘know your customer’ norms that mandated banks to undertake updation.

In his concluding remarks, the governor said the second wave is “not insurmountable”, and that India’s future remains “bright”.

Also read: Serum Institute to invest £240 million in UK to expand business, set up sales office


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