The Reserve Bank of India (RBI) recently held its MPC (monetary policy committee) meeting and Governor Shaktikanta Das has officially announced the availability of RTGS system on a 24-7 basis for 365 days in a year. This will greatly enhance the overall ease of doing business according to him. Das has kept the repo rate at the same levels without any changes in the latest meeting of the MPC.
The RBI has also kept its stance absolutely unchanged at the meeting as well. The RBI Governor has emphasized on Real Time Gross Settlement (RTGS) availability round the clock for benefiting businesses since RTGS is used for transacting higher amounts. The apex bank has also increased the retail portfolio limits of Indian banks to Rs. 7.5 crore with regard to fresh loans and also qualifying exposure. It has rationalized the risk weightage for all housing loans until the 31st of March, 2022.
The Reserve Bank of India (RBI) is expecting 3-speed economic recovery for the country along with sector-wise variations. Das has opined that manufacturing sectors may witness utilization of capacity in the third quarter, consumer goods, agriculture, pharmaceuticals and power sectors should witness comparatively faster recovery. He has also stated that the actual GDP (gross domestic product) for the present financial year may witness a contraction of approximately 9.5%. The connection between LTV (loan to value) ratios and risk weightage as compared to the previous method of linking risk weightage to both LTV and pricing should boost the sector, particularly for luxury properties which have been witnessing a severe drop in demand. High value loans should become comparatively more affordable with risk weightage rationalization.
The retail exposure increase to Rs. 7.5 crore from Rs. 5 crore will help businesses and individuals greatly according to the Chief Executive Officer at Square Yards, Tanuj Shori. Shaktikanta Das has also stated that the contraction seen in economic growth for the April-June quarter is firmly behind the country with new silver linings being clearly visible along with steady recovery in energy consumption and manufacturing growth. The On Tap TLTRO measure has been announced for ensuring liquidity assistance to several economic sectors and Indian banks. This scheme is worth approximately Rs. 1 lakh crore and will emphasize on economic revival in particular business sectors. The extension of the co-lending scheme for HFCs and NBFCs is another encouraging step according to industry experts.
Published Date: 09 October 2020
