By Ankur Mishra
The Reserve Bank of India (RBI) on Wednesday announced a slew of measures to improve the credit flow into the program. The measures include things like liquidity help of Rs 50,000 crore for fresh lending for the duration of FY22 to all India economic institutions (AIFIs) like Nabard, Sidbi, NHB and Exim Bank.
Apart from it, the regulator has enhanced the loan limit for person farmers to Rs 75 lakh from Rs 50 lakh against pledge of agricultural make. The RBI has also extended the priority sector lending (PSL) classification advantage for lending by banks to non-banking economic organizations (NBFCs) by six months.
“This dispensation which was available from August 13, 2019, till March 31, 2021, is being further extended for another six months, up to September 30, 2021,” the RBI stated. In August 2019, RBI had decided that the bank credit to registered NBFCs for on-lending will be regarded as priority sector lending.
With a view to rising the concentrate of liquidity measures on revival of activity in precise sectors, the RBI has extended the targeted lengthy-term repo operations (TLTRO) scheme by six months till September 30, 2021.
Raj Kiran Rai G, chairman, Indian Banks’ Association and MD & CEO of Union Bank of India, stated the extension of on-tap TLTRO scheme and extra funding to AIFIs would assistance in offering sources for the needy segments of the economy.
SS Mallikarjun Rao, MD and CEO of Punjab National Bank, stated, “While the liquidity has been ensured via TLTRO in case the demand picks up, the opportunity of on lending through NBFCs, enhancement of loan limit against warehouse receipts, liquidity facility for AIFIs are all good moves to ensure continued availability of credit which aid faster economic recovery.”
Anil Gupta, vice president, economic sector ratings, ICRA, stated extension of the PSL scheme is positive and will additional enhance credit flow to NBFCs and HFCs for lending to identified sectors. “NBFCs and HFCs have benefitted by accessing the fresh funding lines at competitive rates while enabling banks to meet their PSL requirements with better risk-return perspective,” Gupta stated.