Finally an aid by RBI for Hotels, travel agent, bus operators & MSMEs

The RBI has made funds available for the industries such as hotels, transport and tourism but the question remains as to whether these industries have to appetite for fresh borrowing when their operations are paralyzed in the lockdowns the central bank has created a separate liquidity window of 15,000 Crore and offers incentives from banks which will be lending to the contract intensive sectors travel agents, private bus operators, rent a car service providers, spa clinics, and beauty parlors can borrow funds under this facilities facility for Three years at repo rate.

RBI on Friday kept the report rate unchanged at 4% a year banks, on the other hand, can park their surplus liquidity up to the size of the loan book created under this scheme with the RBI and earn 40 basis points higher than what they normally do through the reverse repo window. This on tab liquidated window will remain open till March 31, 2020 Governor DAS said. There will be a separate liquidity window for this facility we are always ready to lend  are eagerly looking to deploy our surplus funds but the trigger has to come from the demand side  senior bank executives said reacting to the Policy announcement.

Doubts have also been raised as to whether the banks would need any borrowing window immediately as they are sitting on idle funds RBI later clarified that banks willing to lend to certain contract intensive sectors using their own resources without availing from the on tap facility will also be eligible for the incentive structure.

The central bank also announced another fresh liquidity support of 16,000 crore for small industries development Bank of India for on lending or providing refinance to micro and medium enterprises particularly smaller MSMEs and other businesses including those in credit deficient and aspirational districts. S-ET

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