RBI GOVERNOR ANNOUNCES MUCH-NEEDED RELIEF MEASURES TO EASE FINANCIAL STRESS: DETAILS LISTED! 

At a time, when the country battles the coronavirus pandemic, the Reserve Bank of India (RBI) announced much-needed relief measures for small and medium-sized financial organisations, who are struggling to operate amid the COVID-19 pandemic.

RBI Governor Shaktikanta Das made his second address to the media since India began the lockdown on March 25. This announcement was made after reports circulated that the government was planning to release another package to support small and medium-sized financial organisations including NBFCs and MFIs. 

Below are few points to keep in mind regarding RBI's fresh measures:

- RBI will conduct a second round of targeted long term repo operations (TLTRO) or TLTRO 2.0 for an initial amount of Rs 50,000 crore. With this new relief, it will help in refinancing NBFCs and MFIs to maintain healthy cash flow to the small and medium enterprises.

- While addressing the meet, RBI Governor said said, "It has been decided to provide special refinance facilities for an amount of Rs 50,000 crores to National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), and National Housing Bank (NHB) to enable them to meet sectoral credit needs."

- The second round of targeted long-term repo operation (TLTRO) were primarily conducted to help small and medium-sized financial organisations which mostly caters to MSMEs. 

- Further in his address, Shaktikanta Das said that the RBI is open to increase the amount to help refinance NBFCs and other small-scale financial institutions if need be.

- RBI undertook three long-term repo operations to help ease the liquidity situation. Meanwhile, a TLTRO operation of Rs 25,000 crore will be conducted today itself. 

- In today's address, RBI focuses on four key areas; to ease pressure on banks and businesses in the country. Firstly, RBI is working to maintain adequate liquidity in the system, facilitating and incentivising healthy cash flow from banks, with this the overall financial stress and enabling formal working of markets will be eased.

- RBI also announced that, "loans given by NBFCs to real estate companies to get similar benefit as given by scheduled commercial banks."

- RBI Governor further asserted that it has decided to reduce the fixed reverse repo rate under liquidity adjustment facility (LAF) by 25 basis points from 4 percent to 3.75 percent, with immediate effect. So that it can help maintain more liquidity in the banking system. 

- Finally, the RBI governor thanked bankers and frontline workers for working tirelessly during this dark time. He also assured that India has adequate reserves to fight the economic crisis at this time.