Has the RBI created the NPAs

The central bank's moves will help farmers, small businesses and the poor

Prime Minister Narendra Modi on Friday commended the Reserve Bank of India (RBI) for its second COVID-19 relief effort, saying the announcements will significantly improve liquidity and credit supplies. “These steps would help our small businesses, MSMEs, farmers and the poor. It will also help all states by increasing the WMA limits, ”PM Modi tweeted. In its second Covid-19 package, the RBI announced measures to bring more liquidity to non-bank financial firms (NBFCs) and relaxed the classification norms for non-performing assets (NPAs) to reflect the dwindling economy and the To stimulate the financial sector. RBI Governor Shaktikanta Das said that for all accounts for which credit institutions decide to grant a moratorium or forbearance that were standard as of March 1, 2020, the 90-day NPA norm will exclude the moratorium period. This means that from March 1, 2020 to May 31, 2020, there will be an asset classification standstill for all of these accounts. Covid-19 has found small and medium-sized businesses, including NBFCs and microfinance institutions, the RBI to be "hard hit" and has also reduced the reverse repo rate - the rate at which the RBI borrows funds from banks - and the funds and improving ways that state governments can meet their fund needs. The central bank also decided to conduct targeted long-term repo operations (TLTRO 2.0) for 50,000 rupees in appropriately sized tranches. Courtesy Indian Express

Indian Express