RBI Extends Term Liquidity Facility of ₹50,000 crore to Emergency Health Services till June 30

Mumbai : The Reserve Bank of India (RBI) has extended the Term Liquidity Facility of ₹50,000 crore to Emergency Health Services upto June 30, 2022 from March 31, 2022 as announced earlier.

“On May 5, 2021, an on-tap liquidity window of ₹50,000 crore at the repo rate with tenors of up to three years was announced to boost provision of immediate liquidity for ramping up COVID-19 related healthcare infrastructure and services in the country. Banks were incentivised for quick delivery of credit under the scheme through extension of priority sector classification to such lending up to March 31, 2022. Banks were expected to create a COVID-19 loan book under the scheme. By way of an additional incentive, such banks were eligible to park their surplus liquidity up to the size of the COVID-19 loan book with the RBI under the reverse repo window at a rate 25 bps lower than the repo rate, i.e., 40 bps higher than the reverse repo rate. Banks have deployed their own funds to the tune of ₹9,654 crore (up to February 4, 2022) towards COVID-19 related emergency health services. In view of the response to the scheme, it is now proposed to extend this window up to June 30, 2022 from March 31, 2022 as announced earlier” RBI said.

Extension of On-tap Liquidity Window for Contact-intensive Sectors

RBI has also extended on-tap Liquidity Window for Contact-intensive Sectors till June 30,2022. On June 4, 2021, it was decided to open a separate liquidity window of ₹15,000 crore at the repo rate with tenors of up to three years available till March 31, 2022 for certain contact-intensive sectors. By way of an incentive, such banks were eligible to park their surplus liquidity up to the size of the COVID-19 loan book, created under this scheme with the RBI. The amount in this COVID-19 loan book attracted a rate which is 25 bps lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate. Banks desirous of deploying their own resources without availing funds from the RBI under the scheme for lending were also eligible for this incentive. Banks have deployed their own funds to the tune of ₹5,041 crore (up to February 4, 2022) to the entities under contact intensive sector. In view of the response to the scheme, it is now proposed to extend this window up to June 30, 2022.