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Opinion | Time for govt, RBI to rethink bank architecture

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RBI is using its firepower to nudge banks to lend to those who are credit-worthy If a tweet was all that was allowed to understand the Reserve Bank of India’s (RBI’s) announcement on Friday, it would read like this: RBI says ‘lend’ to banks.

Banks say: you are safer, we keep our money with you and big companies that are already liquid. RBI reduces the interest on money banks keep in the central bank (reverse repo down by 25 basis points), RBI gives ₹50,000 crore to banks through targeted long-term repo operations or TLTRO 2.0, and another ₹50,000 crore to Small Industries Development Bank of India (Sidbi) and National Bank for Agriculture and Rural Development (Nabard) to lend to microfinance institutions (MFIs) and non-banking financial

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