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April 17RBI announcements to help infuse liquidity, facilitate credit flow amid COVID-19 lockdown: Exporters
Source- The New Indian Express
The announcements made by the Reserve Bank on Friday will help in infusing liquidity and facilitating bank credit flow to traders and industry at a time when both are battling the lockdown due to coronavirus outbreak, according to exporters.
Trade Promotion Council of India (TPCI) Chairman Mohit Singla said that steps announced by RBI, like 90-day NPA (non-performing assets) norm not to apply on the moratorium granted on existing loans by banks, and lowering reverse repo rate to 3.75 per cent will surely ease pressure on the banking system. "Measures announced today to infuse liquidity, facilitate bank credit flow and ease financial stress will surely help industry and economy fight this deadly pandemic," Singla said.
Commenting on the measures, Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that it will have positive impact on financial system and economy in this difficult time. "Refinancing of Rs 15,000 crore to SIDBI and 90 days NPA norms to exclude moratorium or deferment period will give relief, particularly to MSME units who are struggling to keep themselves alive with no business, but are saddled with fixed costs", Saraf said.
However, he added that the government should immediately announce a comprehensive economic package for the industry to provide them relief in payment of wages, statutory obligations, rental and utilities. "Exporters` interest should be paramount in the package as they are the worst sufferers facing challenges both at the domestic turf and in the global market," he said.
Financial advisory firm Findoc Group Managing Director Hemant Sood said RBI`s measures may help financing companies to get liquidity relief, particulary NBFCs and microfinance institutions. "The relaxation in NPA classification norms will sooth market and bring investors back to the market, and 25 basis points reduction in the fixed reverse repo rate will help banks to lend and improve liquidity in the system," Sood said.
He hoped that the measures will boost investor confidence and the quarterly numbers to be reported by corporates will no longer leave a negative overall impact.