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Ready as lender of last resort, but conditions do not warrant: RBI
Mumbai, Dec 5 (IANS) Sticking to its view that liquidity is not a major concern, the Reserve Bank of India (RBI) on Wednesday said adequate measures are being taken and the current situation does not warrant it to be the lender of last resort.
“RBI is guided by and large by the principle of addressing system-wide liquidity. The RBI also stands ready to be the lender of last resort provided conditions warrant that sort of an extreme measure,” RBI Deputy Governor Viral Acharya said.
Talking to reporters after the announcement of the monetary policy review, Acharya said the economy is at a level of aggregate credit growth which remains comfortably in excess of nominal GDP growth with a fairly robust distribution across sectors.
“In our assessment, there is no such necessity at the present given the sound health of our economy,” he said.
The weighted average call rate at which money market participants transact in the unsecured funding market on an overnight basis continues to remain soft and below the policy rate on average, he said.
RBI has been at loggerheads with the government on liquidity issue for some months, particularly after payment defaults by Infrastructure Leasing and Financial Services (IL&FS)-triggered liquidity crunch for the non-banking financial companies (NBFCs).
Acharya, however, said the RBI has deployed a variety of liquidity tools and continues to provide system-wide liquidity at an augmented quantum and pace to ease the situation.
“These measures have collectively eased the funding stress in a steady manner over the past two months and they have given NBFCs and HFCs (Housing Finance Companies) time and the opportunity to make their own balance sheet adjustments on both asset and liability side,” he said.
RBI has injected durable liquidity through open market operations (OMO) purchases to the tune of Rs 1.36 trillion in the current financial year. The pace of OMOs has stepped up with the injection of Rs 1 trillion in the last three months.
“We expect that this increased frequency and quantum of OMO purchases may be required until end of March but the exact calibration will depend on sustained changes in the behaviour of currency in circulation and the magnitude of sterilisation of RBI FX operations which keep evolving with external sector conditions,” he said.
The bank has also provided infusion of liquidity through term repos in addition to the usual provision via the liquidity adjustment facility (LAF). Further, the RBI increased the facility to avail liquidity for liquidity coverage ratio (FALLCR) from October 1 to enhance the ability of individual banks to avail liquidity if required from the repo markets.
“Specifically for NBFCs and HFCs, we have increased the liquidity that banks can raise against their G-Sec holdings as collateral, specifically also for on-lending to NBFCs and HFCs. We have also relaxed the concentration limits on banks for lending to individual NBFCs and HFCs,” he said.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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