RBI Policy: To extend 500-bln-rupee liquidity to NABARD, SIDBI, NHB

Informist, Wednesday, Apr 7, 2021


MUMBAI – The Reserve Bank of India will extend fresh liquidity support of 500 bln rupees to financial institutions such as National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, and National Housing Bank for new lending in 2021-22 (Apr-Mar) to support economic growth.


Accordingly, NABARD will be provided a special liquidity facility of 250 bln rupees for a period of one year to support agriculture and allied activities, the rural non-farm sector and non-banking financial companies-microfinance institutions, the central bank said in its Statement on Developmental and Regulatory Policies released today. 


National Housing Bank will get 100 bln rupees to support the housing sector, while SIDBI will be sanctioned 150 bln rupees to meet the funding requirements of micro, small and medium enterprises for a period of up to one year.


The funds under this facility will be provided at the RBI's prevailing repo rate, which is currently at 4%. 


In 2020, RBI had provided special refinancing facilities to these financial institutions in order to ensure continued flow of credit to the real economy in the aftermath of the COVID-19 pandemic. The central bank had provided 750 bln rupees during Apr-Aug. 


NABARD, SIDBI and NHB will, however, repay the facilities extended to them during April-May 2020, the central bank said.  


In his address announcing the Monetary Policy Committee's resolution, Governor Shaktikanta Das said the RBI would support the market with adequate liquidity through its various tool kits.  End


Reported by Bhakti Tambe

Edited by Avishek Dutta


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