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RBI's Decision Well-Timed: Industry

The RBI has 'most correctly' recognised how small businesses and financial entities at the grassroots are bearing the most considerable burden of the pandemic and has thus unveiled measures to help them

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The RBI's decision on supporting small businesses and priority loans to COVID-related health infrastructure are well-timed and propitious as the pandemic is posing new challenges for the economy, according to industry.

The RBI on Wednesday allowed certain individual and small borrowers more time to repay debt and allowed banks to give priority loans to vaccine makers, hospitals, and COVID-related health infrastructure as it announced support measures to cushion the pandemic's blow on the economy.

Industry chamber CII said that opening of on-tap liquidity of Rs 50,000 crore till 31 March 2022 for health care sectors is encouraging as the health care and allied sectors are facing tremendous stress of increased demand, supply constraints, and liquidity scarcity.

'At a time when the pandemic is posing new challenges for the economy, the well-calibrated first tranche of measures announced by the RBI today pertaining to supporting the small businesses and incentivising lending to the healthcare sector is indeed well-timed and propitious,' it said in a statement.

Hailing the decisions, the Federation of Indian Export Organisatrions (FIEO) said that it will help in expanding the health infrastructure in the country, which is in distress due to increasing coronavirus infection.

'The federation together stands with the government in all its efforts to control the surge in COVID-19 pandemic and support the economic growth of the country,' it added.

Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said these are timely measures to prop up the much-needed COVID-related healthcare infrastructure in India.

The loan restructuring, he said, will be a timely help for many MSMEs (Micro, Small & Medium Enterprises), he added.

“Apart from the loan restructuring facility, the decision to allow banks to extend the moratorium under restructuring frame 1.0 for a period of up to two years will provide breathing space to many MSMEs trying to recover from the impact of pandemic,' Sakthivel said.

Assocham said that these are important confident-building announcements by the RBI.

''The targeted policy response and easy credit promised to the entire healthcare value chain, in the government and private sector including the vaccine manufacturers are the most apt measures at this point of time'' it said.

The RBI has 'most correctly' recognised how small businesses and financial entities at the grassroots are bearing the most considerable burden of the pandemic and has thus unveiled measures to help them, it added.

Niranjan Hiranandani, National President, NAREDCO said that these 'pro-active moves' are positive for India's beleaguered economy, which was on the path to recovery from the impact of the pandemic in 2020 but is facing the challenge of the second wave.

The focus of the announcements 'were small businesses, individuals and MSMEs; real estate as an industry looks forward to supporting in form of measures which will help tide over the challenges posed by the second wave,” he said. 

(PTI)