TVS Motor Company, one of India's leading two-wheeler manufacturers, has welcomed the Reserve Bank of India's efforts to support and...
TVS Motor Company, one of India's leading two-wheeler manufacturers, has welcomed the Reserve Bank of India's efforts to support and revive the economy in the middle of a countrywide lockdown to battle the COVID-19 outbreak. The RBI has announced several measures to boost liquidity to Non Banking Financial Corporations (NBFCs) and other financial institutions. The RBI has also reduced the reverse repo rate by 25 basis points to 3.75 per cent. The central bank also announced a special Rs. 50,000 crore targeted long-term repo operation, called TLTRO 2.0, to address the liquidity needs of NBFCs and microfinance institutions.
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"I strongly support the measures announced by the RBI today to support the economy in this period. It is a sign of their continued efforts to stimulate economic activity and protect jobs. The LTRO for NBFCs and micro-lenders is a good tool to ease liquidity without tinkering with policy rates and Rs. 50,000 crore is a substantial amount. This should, restore confidence especially among the MSME sector which provides a significant portion of the country's jobs and is integral to all supply chains," said Venu Srinivasan, Chairman, TVS Motor Company.
"That coupled with a cut in the reverse repo rate will incentivise banks to actively lend to those most in need of funds and make it affordable for businesses to borrow, address their working capital needs and get back into action as the country opens," he added.
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Under the RBI's measures, banks availing the funds under TLTRO 2.0 will be required to deploy the same within one month and 50 per cent of the money has been earmarked for midsized NBFCs. RBI Governor Shaktikanta Das said the latest measures are aimed at maintaining "adequate liquidity" and ease the financial stress in the system, and facilitate the flow of credit in banks. He reiterated that the RBI is monitoring the COVID-19 situation "very closely" and will continue to use all tools necessary to deal with the economic fallout from the outbreak.
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