IIFLs Sanjiv Bhasin lauds RBI decisions to cut LCR, refinance NABARD, NHB
Reserve Bank of India (RBI) has reasonably addressed all the concerns of the market and there is no cause to worry now, Sanjiv Bhasin Director at IIFL Securities told Zee Business Managing Editor Anil Singhvi in an exclusive interview
The Reserve Bank of India (RBI) has reasonably addressed all the concerns of the market and there is no cause to worry now, Sanjiv Bhasin Director at IIFL Securities told Zee Business Managing Editor Anil Singhvi in an exclusive interview. Bhasin was responding to a question on why the market witnessed profit booking after the announcement by the RBI Governor Shaktikanta Das. Also, he was asked whether the market was expecting something more from the RBI?
The RBI has done all it could though it could have simplified some technicalities, Bhasin said. The RBI has given more than what the market was expecting and there could be further reliefs over a period of time, he said. The RBI has today reduced the liquidity coverage ratio; gave Rs 50000 cr to NABARD (National Bank for Agriculture and Rural Development) and NHB (National Housing Bank) which means that there will be relief for commercial real estate companies, Bhasin said.
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Importantly, in order to ease the liquidity position, the LCR requirement of Banks was brought down from 100 per cent to 80 per cent by RBI with immediate effect. "The requirement shall be gradually restored back in two phases a " 90 per cent by October 1, 2020 and 100 per cent by April 1, 2021," Das said.
RBI has assured that its purse was not limited to measures announced today and there could be more on the basis of need, Bhasin further said. He explained that borrowing will improve and credit will expand as things come to normal, going forward.
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Though the government may announce its own measures but the RBI has done all it could do, he indicated.
In a press conference today, RBI Governor said that the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic. The Reserve Bank of India cut its reverse repo rate by 25 basis points on Friday, in a bid to push banks to deploy excess funds within the system toward lending, and help revive growth.
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RBI today cut reverse repo rate from 4% to 3.75%. Governor Shaktikanta Das added that the Repo rate itself remains unchanged at 4.40 per cent.
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