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April 07, 2021 23:13 IST
Panel to review ARCs in the works, priority sector rules to stay for 6 more months
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First base: The extension for priority sector norms will boost credit at the bottom of the pyramid. V.V. Krishnan
Panel to review ARCs in the works, priority sector rules to stay for 6 more months
To help mitigate the impact of the pandemic and aid economic revival, the RBI said it would extend fresh support of ₹50,000 crore to the All India Financial Institutions for new lending in FY22.
Accordingly, NABARD will be provided a special liquidity facility (SLF) of ₹25,000 crore for one year to support agriculture and allied activities, the rural non-farm sector and non-banking financial companies-micro finance institutions, the RBI said.
Comments on RBI MPC announcement from Muthoot Finance, Creditas Solutions, Kotak Mahindra Bank
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Muthoot Finance s MD, George Alexander Muthoot on RBI s MPC announcement: RBI s MPC expectedly stood pat on policy rates and reiterated accommodative stance as long as necessary to ensure economic activities are fully supported for durable recovery despite second wave of Covid-19 cases. The central bank retaining its 10.5% GDP growth forecast for FY22 shows faith in contribution to economic revival by key sectors and its liquidity measures along with bank lending to NBFCs being extended till September 30, 2021 is an acknowledgement of the systematically important role NBFCs have played in lending to the last mile. We remain steadfast and true to our promise of supporting all financial needs of MSMEs and individuals in making them Atmanirbhar.
RBI status quo on policy supportive of economic growth; liquidity measures in right direction: Experts
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Last Updated: Apr 07, 2021, 07:38 PM IST
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Synopsis
The six-member Monetary Policy Committee (MPC) unanimously decided to continue with the accommodative stance as long as necessary to sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy.
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The RBI will also provide Rs 25,000 crore to NABARD, Rs 10,000 crore to NHB and Rs 15,000 crore to SIDBI.
RBI s decision to keep repo rate unchanged for the fifth time in a row is in line with the economic need to encourage growth, financial market players and experts said on Wednesday.
Highlights of RBI monetary policy announcements
Highlights of RBI monetary policy announcements RBI keeps policy rate unchanged for fifth time in a row; repo at 4 pc Economic growth projection for current fiscal retained at 10.5 pc RBI to maintain accommodative monetary policy stance to support growth, keep inflation at targeted level Says recent surge in COVID-19 infections has created uncertainty over economic recovery, focus be on containing virus spread Projects 26.2 pc and 8.3 pc growth in June and September quarters; 5.4 pc and 6.2 pc in December and March quarters respectively Retail inflation projection revised to 5 pc in March quarter 2020-21 Projects retail inflation at 5.2 pc in June and September quarters
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RBI to set up panel to undertake review of ARCs.
To facilitate smooth functioning of Asset Reconstruction Companies (ARCs), the Reserve Bank of India (RBI) on Wednesday (April 7) decided to set up a panel to undertake a comprehensive review of the working of such institutions. In the latest Budget, Union Finance Minister Nirmala Sitharaman announced setting up of ARC and Asset Management Company to tackle stressed assets.
After enactment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in 2002, regulatory guidelines for ARCs were issued in 2003 to enable development of this sector and to facilitate smooth functioning of these companies.