Indian government has a tough task of boosting economy once the coronavirus pandemic is under control. Indian government has announced strict lockdown to deal with the infection and this has led to a grinding halt for Indian economy. Majority of companies have stopped manufacturing and government is planning to open some of them, based on the risk assessment. RBI has announced a few steps to help the Indian economy and to help banks as well.

Comments on RBI policy by Ms. Padmaja Chunduru, MD& CEO, Indian Bank follow....

The tone of RBI is of empathy and support to needy sectors. The TLTRO focused on mid-size NBFCs and MFIs is positive. The 90 day extension in NPA reckoning for stressed standard assets as on 1 March effectively postpones NPA classification for accounts that were slipping to NPA between March and May.

Given the optimism around economy coming back in phases and the support being extended through emergency COVID loans and other lines of credit, this will help all sectors , especially MSME and Retail. The 90 day deferment given for NCLT filing will help banks, if it can be taken as saving on 20% additional provision in these cases.