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RBI Measures
April 19 , 2020
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- It has decided to reduce the fixed reverse repo rate under liquidity adjustment facility (LAF) by 25 basis points.
- It cut the reverse repo rate from 4% to 3.75%.
- Earlier in March Month, it cut the repo rate to 4.4% from 5.15%.
- Also, the central bank has announced Rs 50,000 crore for Long Term Repo Operation (LTRO).
- This time the LTRO is to focus on liquidity needs of microfinances and NBFC.
- Earlier the LTRO went largely to the public sector undertakings and larger corporations.
- RBI has eased the Liquidity Coverage Ratio (LCR) from 100% to 80%.
- The LCR is the assets held by the banks to make sure its ongoing ability to meet short-term obligations are fulfilled.
- The RBI will also provide Rs 50,000 crore special finance assistance to institutions such as SIDBI (Small Industries Development Bank of India), NABARD, National Housing Bank.
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