SS Mallikarjuna Rao, MD and CEO of Punjab National Bank, said the pressurized liquidity of Rs 50,000 crore for the healthcare sector linked to Covid as well as incentives for banks such as priority sector classification and higher interest on the excess liquidity window will facilitate access to emergency health services.
Par ankur mishra
The Reserve Bank of India (RBI) on Wednesday announced immediate liquidity of Rs 50,000 crore for banks to allow them to grant Covid loans to health establishments. This repo liquidity window will remain open until March 31, 2022. Under this program, banks can provide new loan support to vaccine manufacturers, hospitals and also patients for treatment, among others.
Banks are also incentivized to provide loans quickly under the program through the extension of the priority sector classification until March 31, 2022, RBI Governor Shaktikanta Das said. Loans will continue to be classified in the priority area until repayment or maturity, whichever comes first.
In an interaction with CNBC TV 18, State Bank of India (SBI) Chairman Dinesh Kumar Khara said the measures would help build health infrastructure and encourage banks to create Covid books. Banks are expected to create a Covid loan portfolio as part of this program. These banks will be eligible to park their excess liquidity up to the size of the Covid loan portfolio under the reverse repurchase window at a rate 40 basis points higher than the reverse repo rate.
Khara added that two vaccine manufacturers have applied for loans from the SBI and can get loans under the new facility.
Bankers also believe the RBI’s program will facilitate access to emergency health services. CII Chairman Uday Kotak said, “The RBI Governor has led the financial sector’s battle against Covid 2.0 with a clear focus on protecting lives and livelihoods.”
SS Mallikarjuna Rao, MD and CEO of Punjab National Bank, said the pressurized liquidity of Rs 50,000 crore for the healthcare sector linked to Covid as well as incentives for banks such as priority sector classification and higher interest on the excess liquidity window will facilitate access to emergency health services.
Under this program, banks can provide new loan support to a wide range of entities, including vaccine manufacturers; importers / suppliers of priority vaccines and medical devices; hospitals / clinics; pathology laboratories; manufactures and suppliers of oxygen and ventilators; importers of COVID-related vaccines and drugs; logistics companies and also patients to be treated.
Echoing the views of the bankers, Rashmi Saluja, executive chairman of Religare Enterprises, said: “The central bank has shown great foresight in announcing an unhindered flow of liquidity to the health sector to stimulate the production of vaccines, drugs related to Covid and crawl. oxygen reserves. This special loan window of Rs 50,000 crore has been categorized as priority sector loans and will ensure a steady flow of loans to the health sector, she added.
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