Make a project -Write your experience during lockdown and write major steps taken by the government to fight against Covid-19
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State governments have been permitted to borrow as much as half their annual target for the year starting April 1 whenever they choose. In a typical year, strict rules would govern the timetable, which would include cash transfers from the Central...
Modi government and RBI are trying to cushion an economy that was slowing even before the coronavirus outbreak.
CHEAPER CASH: A series of steps announced this year aim to encourage banks to lend.
— Banks don’t need to set aside cash reserves for loans given to small businesses between Jan. 31 to July 31, or for credit to help consumers buy a car or home (announced Feb. 6)
— Policy lending rate -- the repurchase rate -- cut by 75 basis points in a single move this year. However, the effective deposit rate has been slashed by 115 basis points to discourage lenders from playing safe and parking the cash with the RBI (March 27 and April 17)
— Cash Reserve Ratio reduced to 3% from 4% (March 27)
Liquidity Coverage Ratio lowered to 80% from 100% (will be restored to 90% by Oct. 1 and 100% by April 1, 2021)
LOAN FREEZE: RBI Governor Shaktikanta Das has stopped the clock on loan repayments amid an unprecedented three-week lockdown announced by Prime Minister Narendra Modi
— All lenders can freeze repayments for three months on term loans outstanding March 1
— Lenders allowed to suspend interest payments on working capital facilities for three months; accumulated interest can be paid later and the loans won’t be in default The steps add to previous measures which allow a one-off restructuring of loans to small businesses that were in default as of Jan. 1
— Loans to commercial property projects that are delayed for reasons beyond the control of the developer are allowed to be treated as standard for another year.
REGULATORY DEFERRALS: Implementation of stricter regulations have been delayed
— Rules requiring banks to fund their activities through stable sources has been deferred to Oct. 1 from April 1
— Completion of Capital Conservation Buffer pushed to Sept. 30 from March 31
— Lenders allowed an additional 90 days to reach a resolution plan on large accounts in default (April 17).
SPECIAL WINDOWS: These include support for corporate borrowers as well as rural industry
— TLTRO 1.0 -- Rs 1 lakh crore of targeted long term funds from the central bank to banks for investing only in corporate bonds, aimed at easing cash crunch at firms (on April 15, RBI announced new rule capping the exposure of any bank to a single entity at 10% of TLTRO funds invested)
— TLTRO 2.0 -- initial Rs 50,000 crore , with at least half going to lower rated firms (April 17)
— Special refinance to umbrella organizations -- Rs 50,000 crore to go to pan-India financiers like Sidbi, Nabard, NHB that affordably fund the rural sector and agriculture (April 17)
HIGHER PROVISIONS: Banks ordered to maintain higher provision of 10% on all frozen loans spread over the January-March and April-June quarters, which can be adjusted later against actual slippages (April 17)
My story begins on the 23rd of March with an announcement from Prime Minister, An announcement that swiftly changed the mood in my flat from that of quite bliss to jittery unrest. You see up until that day life was normal. It almost felt like wasn’t going anything at all . There was no panic, . I felt like we were moving in slow motion and I would use disinfectants to clean the table I sat at in the library and avoid shaking hands with those around me. I used to look around and wonder if people even knew of what was going on. And then all at once everything changed. Alert level 4 entailed all non-essential businesses being shut down, no travelling between localities, no leaving the house except for essential requirements such as groceries, pharmacies, hospital, exercise etc. We had 48 hours to choose where we would live during this lockdown as this couldn’t be changed midway through the lockdown due to the risk of community spread of the virus. For domestic students this decision was simple, most decided to travel home and live with family. But for me, student living with two other domestic students, not only was home not an option, but I realised I’d be completely alone in my flat. I won’t forget sitting in a corner watching my flatmates pack their bags getting ready to leave the next day to make it home in time before the lockdown began. Don’t tell anyone but I shed a few tears from stress and uncertainty. I live in an area where all the flats around mine are occupied by students. So needless to say, when I looked out of my window and saw everyone loading full bags into their cars preparing to leave, I felt even worse. The number of emails we received that day from various lecturers and university heads must have been a record of some sort. And none gave us a clear picture of what was happening until the very last one which said that our university was going to go into an extended break during the lockdown period. Receiving this news didn’t make me happy as I was looking forward to online classes as they would give me something to do throughout the day. But the stage was set and the curtains were lifted, this is how life was going to be like for the next four weeks. My flatmates and I had a last dinner together, for a while at least, and had a shot of tequila each, toasting to the success of this lockdown. Tomorrow came too soon and I bid them adieu. As bleak as it was, I knew I had it better off than a lot of people. Unlike so many in this world I was privileged enough to have an “indoors” to go to. So as their cars drove away, I told myself to adjust to these new changes as positively as possible. And that’s all we can really do in life, face every curveball life throws at us positively.
The steps India has taken so far to contain economic fallout of Covid-19:-
• State governments have been permitted to borrow as much as half their annual target for the year starting April 1 whenever they choose. In a typical year, strict rules would govern the timetable, which would include cash transfers from the Central...
<>Modi government and RBI are trying to cushion an economy that was slowing even before the coronavirus outbreak.
<>CHEAPER CASH: A series of steps announced this year aim to encourage banks to lend.
— Banks don’t need to set aside cash reserves for loans given to small businesses between Jan. 31 to July 31, or for credit to help consumers buy a car or home (announced Feb. 6)
<> LOAN FREEZE: RBI Governor Shaktikanta Das has stopped the clock on loan repayments amid an unprecedented three-week lockdown announced by Prime Minister Narendra Mod