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RBI Creates Liquidity Window Of ₹15,000 Crore To Help Hotels, Tourism & Restaurants

by Tania Tarafdar
RBI Creates Liquidity Window Of ₹15,000 Crore To Help Hotels, Tourism & Restaurants

The restaurant and tourism industry in India has hit a rock bottom due to the pandemic. Plus, the second wave of virus infections across the country has threatened to derail India’s economic recovery. To revive the ailing sectors including tourism, restaurant, and even beauty parlours, the central bank announced a ₹15,000 crore liquidity window. “To mitigate the adverse impact of the second wave of the pandemic on certain contact-intensive sectors, a separate liquidity window of Rs15,000 crore is being opened till March 31, 2022, with tenors of up to three years at the repo rate,” said Reserve Bank of India governor Shaktikanta Das in a statement.

Banks Will Support Hotel, Restaurant, Tourism & Aviation Sector

Under the scheme, banks can help contact-intensive sectors like hotels and restaurants, travel agents, tour operators, and heritage facilities. Banks will also support the aviation ancillary services and other services that include private bus operators, rental car services, event organizers, spa clinics, beauty parlours, and saloons.

Also read: COVID-19 Curbs Will Wipe Out 90% Restaurants In Maharashtra: 4 Ways The Government Can Help The Industry Recover

Banks Will Provide Excess Liquidity To Businesses

The second wave of the pandemic has hit small businesses the hardest and RBI’s measures will come as a sigh of relief. The (RBI) will incentivise banks by allowing them to provide excess liquidity, equivalent to loans. This announcement comes barely a month after RBI announced a liquidity window of ₹50,000 crores for supporting healthcare infrastructure. India’s Economy To Face Over 3 Trillion Loses As Maharashtra Restaurants & Malls Shut Down.

Also read: Covid-19’s Impact On The Indian Airline Industry

Besides, The RBI is keeping rates steady at record lows with the repo rate (the lending rate) at 4%, and the reverse repo rate (the borrowing rate) at 3.35%. This will come as a huge help for the hard-hit sectors as well as for the small businesses.