The Reserve Bank of India (RBI) has announced new set of measures to mitigate the impact of covid-19 pandemic on the economy.
Incentivising banks to lend, rather than depositing excess liquidity with RBI, the reverse repo rate has been reduced by another 25 basis points to 3.75%.
Banks deposited ₹4.9 trillion net surplus liquidity with RBI on 16 April. Lower rates encourage banks to lend rather than keep deposits with RBI.
Liquidity injections of ₹1 trillion under Targeted Long-Term Repo Operations (TLTROs), part of RBI’s earlier ₹3.74 trillion liquidity enhancing measures for banks, were largely accessed by public sector enterprises and large corporates.