The Reserve Bank of India has announced three additional measures to help the industry, banks and state governments to deal with the COVID-19 pandemic.
First, it has allowed states and union territories to borrow more from RBI by extending the ‘Ways and Means Advances’ (WMA) limit.
Reserve Bank of India had constituted an Advisory Committee under Sudhir Shrivastava to review the Ways and Means limits for State Governments and Union Territories (UTs), the final recommendations of which are still pending.
However, keeping in mind the increased borrowing requirements of states to deal with the coronavirus health crisis, RBI has now increased WMA limit by 30 percent from the existing limit for all States/UTs.
The revised WMA limits to come into force w.e.f April 1, 2020 and will be valid till September 30, 2020, RBI said.
Second, the central bank has extended the time for realization and repatriation of export proceeds for exports made up to or on July 31, 2020 to 15 months from the date of export.
"The measure will enable the exporters to realize their receipts, especially from COVID-19 affected countries within the extended period and also provide greater flexibility to the exporters to negotiate future export contracts with buyers abroad," RBI said in a release.
At present, the value of the goods or software exports made by the exporters is required to be realized fully and repatriated to the country within a period of 9 months from the date of exports.
Third, the RBI has allowed banks to defer activation of countercyclical capital buffer (CCyB) for a period of one year or earlier, as may be necessary, as it may be difficult for banks to raise money in this environment.
First, it has allowed states and union territories to borrow more from RBI by extending the ‘Ways and Means Advances’ (WMA) limit.
Reserve Bank of India had constituted an Advisory Committee under Sudhir Shrivastava to review the Ways and Means limits for State Governments and Union Territories (UTs), the final recommendations of which are still pending.
However, keeping in mind the increased borrowing requirements of states to deal with the coronavirus health crisis, RBI has now increased WMA limit by 30 percent from the existing limit for all States/UTs.
The revised WMA limits to come into force w.e.f April 1, 2020 and will be valid till September 30, 2020, RBI said.
Second, the central bank has extended the time for realization and repatriation of export proceeds for exports made up to or on July 31, 2020 to 15 months from the date of export.
"The measure will enable the exporters to realize their receipts, especially from COVID-19 affected countries within the extended period and also provide greater flexibility to the exporters to negotiate future export contracts with buyers abroad," RBI said in a release.
At present, the value of the goods or software exports made by the exporters is required to be realized fully and repatriated to the country within a period of 9 months from the date of exports.
Third, the RBI has allowed banks to defer activation of countercyclical capital buffer (CCyB) for a period of one year or earlier, as may be necessary, as it may be difficult for banks to raise money in this environment.
First Published: Apr 1, 2020 12:54 PM IST
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