Reactions from Geojit Financial Services on RBI's announcement

Dr. V K Vijayakumar at Geojit Financial Services

"RBI has come out with announcements with far reaching beneficial consequences to the financial system and the economy in this difficult time. Measures to maintain adequate liquidity in the system, incentivise further commercial bank lending by cutting reverse repo rate to 3.75 % and facilitating normal functioning of markets are indeed laudable. Particularly, announcement of LTRO 2 of Rs 50000 cr for targeted funding to NBFCs and MFIs will be beneficial for this segment. Refinancing of Rs 50000 cr to Nabard, SIDBI and NHB is another welcome move. The reclassification of NPA norms from 90 days to 180 days is a great relief to commercial banks. In brief, this is a big bazooka but with caution and prudence. Enhancement of Ways & Means advances to states by 60 % will be a relief to states stressed by the pandemic."

Deepthi Mary Mathews at Geojit Financial Services

"In a span of 20 days, RBI announced the second round of liquidity boosting measures to address the economic crisis due to COVID-19, with special focus on NBFCs and MFIs. TLTRO and reduction of reverse repo rate to 3.75 percent is expected to improve liquidity in the NBFC sector. Similarly, the loans given by the NBFCs to real estate to get similar benefits as given by commercial banks is a support to both the NBFC and real estate sector."

Source : Equity Bulls

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