RBI POLICY : ANY CHANGES ?

WE HAVE CAME ACROSS MANY CHANGES THIS YEAR , IN THE MONTHS OF COVID-19 PANDEMIC , IN THE STRUCTURE OF MONETARY POLICY . RBI HAS AGAIN REVIEWED THE MONETARY POLICY BUT THERE ARE NO CUTS IN INTREST RATES RATES BUT FEW CHANGES IN THE POLICY . INDIA IS GOING THROUGH INCREASING INLATIONARY PRESSURES ALONG WITH THE CONSTANT SLOWING DOWN OF THE ECONOMY . IN THE MONTHS OF MAY AND JUNE , WE HAVE SEEN LITTLE RETRIEVE IN DEMAND , GIVING US HOPES FOR THE ECONOMIC RECOVERY . AGAIN , WE SEE THE DOWNFALLS IN COMING MONTHS . THE DEMAND WILL RETRIEVE BUT WILL TAKE TIME , FEW MORE MONTHS .THE KEY POLICY DECISIONS MADE BY RBI IN THIS REVIEW ARE :

  • BANKS ARE ALLOWED TO RESTRUCTURE STRESSED CORPORATE AND MSME LOANS , DIDN’T EXTEND THE MORATORIUM ON LOAN REPAYMENTS , OFFERED TO BORROWERS AHEAD OF AUGUST 31 . LOANS CAN BE RESTRUCTURED FROM LARGE CORPORATES , MICRO , SMALL AND MEDIUM ENTREPRISES , INDIVIDUALS TO LOWER THEIR RISING STRESS.
  • BORROWING LIMITS AGAINST GOLD RELAXED , INCOMES AND JOBS HITTING ACROSS SECTORS , HAS ALLOWED INDIVIDUALS TO RESTRUCTURE THEIR LOANS BY DECEMBER 31 , 2020 , WITH MAXIMUM EXTENSION OF 2 YEARS.
  • RS 10000 CRORES SUPPORT FOR NHB , NABARD.
  • SUPPORTING THE START UPS WHICH ALL ARE INCLUDED IN THE PRIORITY SECTOR IN THEIR LENDING NORMS.

IT IS BELEIVE THAT THERE WILL BE CONTRACTION IN INDIA’s GDP IN 2020-21 AND INFLATION WILL REMAIN A HUGE BEAR IN FRONT US , SUPPLY CHAIN DISRUPTIONS , PRICE SURGES IN FOOD SECTORS. INFLATION HAD GONE UP FROM 5.8% IN MARCH TO 6.1% IN JUNE 2020 .

RESERVE BANK OF INDIA HAS ALSO EXTENDED THE ONE TIME DEBT RESTRUCTURING FOR THE SMALL BUSINESSE BY ANOTHER 3 THREE MONTHS TO MARCH 2021 , SOME EXISTING PRVISIONS ARE ALSO RELAXED FOR AVAILING OF THIS SCHEME BY MICRO , SMALL AND MEDIUM ENTREPRISES , RECENTLY.

RBI GOVERNOR , SHAKTIKANTA DAS , SAID THAT IMPROVEMENT IS MADE IN THE MONETARY TRANSACTIONS AS LIQUIDITY CONDITIONS ARE BEARABLE AND HAVE GIVEN BENIFIT TO THE BORROWERS BY REDUCING THE LENDING RATES BY 1.62 PERCENTAGE POINTS . RBI HAS OVERALL RS5 LAKH CRORES OF LIQUIDITY AND HAS SLASHED TYHE BENCHMARK OF 250 BASIS POINTS AND OTHERS WERE THE INFORMATION REGARDING THE FOOD CREDITS AND NON BANK FINANCIAL COMPANIES.

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