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RBI PROPOSES TERM LIQUIDITY FACILITY OF RS 50,000 CRORE TO EASE ACCESS TO EMERGENCY HEALTH SERVICES

RBI PROPOSES TERM LIQUIDITY FACILITY OF RS 50,000 CRORE TO EASE ACCESS TO EMERGENCY HEALTH SERVICES

Context

Reserve Bank of India will provide a term-liquidity facility of ₹ 50,000 crore to ease access of funds for emergency medical services.

Details

  • Under the liquidity scheme, banks can support entities including vaccine manufacturers, medical facilities, hospitals and patients.
  • The funds will be provided for a tenure of up to 3 years and this lending will get priority sector classification till repayment or maturity.
  • Banks can create a special loan book and park liquidity equal to their Covid loans at 40 basis points above the reverse repo rate.
  • RBI announced targeted long-term repo operations for small finance banks of up to ₹ 10,000 crore.
  • The funds can be used for lending of up to ₹ 10 lakh per borrower.

About Reserve Bank of India

  • Established : On April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • It is fully owned by the Government of India.
  • Headquarter : Mumbai(Since 1937, previously in Kolkata).
  • Preamble of RBI :
    • To regulate the issue of Bank notes.
    • To operate the currency and credit system of the country.
    • To release a monetary policy framework.
    • To maintain price stability.

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