Strongly Support RBI’s Measures To Support Economy: TVS Chairman Venu Srinivasan

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Starting April 20th, India’s economy will be cranked for a gradual restart after the wheels had stopped turning since the current lockdown was enforced. Following notifications and addendums from the Home Ministry which lay guidelines for specific industries which can start operations, today, the Reserve Bank of India made an announcement about measures which will support the economy through these unusual times. Industry leaders have voiced their opinions about the measures and TVS Motor Company’s Chairman, Mr Venu Srinivasan has come out in strong support of the regulator’s announced measures.

Mr Venu Srinivasan Chairman TVS Motor Company

After the RBI Governor’s press conference today, Mr Srinivasan said, “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. 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.”

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TVS Motor Company Logo

RBI Governor Shaktikanta Das announced measures to boost the financial sector, which included injecting Rs 50,000 crore via targeted long-term repo operations so that banks can provide more liquidity to small and mid-sized NBFCs and microfinance institutions. For banks to lend more, the RBI has also announced a cut in the reverse repo rate from 4 per cent to 3.75 per cent. An additional INR 50,000 crore finance facility will be provided to financial institutions such as NABARD, SIDBI and NHB. The total amount will be divided into amounts of INR 25,000 crore, INR 15,000 crore and INR 10,000 crore, among the three, respectively. Harping on the need to conserve capital, the Governor announced that scheduled commercial banks and co-operative banks cannot declare dividend till September-end 2020. To enhance liquidity, the RBI announced a reduction in LCR (Liquidity Coverage Ratio) for banks from 100% to 80%. These are just some of the measures announced and you may visit the RBI website to know about the announcement in its entirety.

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