`50K-cr on-tap loans for healthcare firms
Considering the massive healthcare infrastructure gap, which got exposed by the pandemic, the Reserve Bank will enable banks to lend Rs 50,000 crore to healthcare infrastructure and services companies.
This on-tap liquidity window of Rs 50,000 crore at the repo rate will be available till March 31, 2022 for a tenure of up to three years. Under the scheme, banks can provide fresh lending support to vaccine manufacturers, importers or suppliers of vaccines and priority medical devices, hospitals and dispensaries, pathology labs, manufacturers and suppliers of oxygen and ventilators, importers of vaccines and Covidrelated drugs, logistics firms and also patients for treatment.
In order to incentivise banks for quick delivery, the credit under the scheme has been classified as priority sector lending. These loans will continue to be classified under priority sector till
Under the scheme, banks can provide fresh lending support to vaccine manufacturers, importers or suppliers of vaccines and priority medical devices, hospitals and dispensaries, pathology
labs, manufacturers and suppliers of oxygen and ventilators, importers of vaccines and Covid-related drugs, logistics firms and also patients for treatment
repayment or maturity, whichever is earlier. Banks may deliver these loans to borrowers directly or through intermediary financial entities regulated by the RBI.
Banks are expected to create a Covid loan book under the scheme. Such banks will be eligible to park their surplus liquidity up to the size of the Covid loan book with the RBI under the reverse repo window at a rate which is 25 bps lower than the repo rate or 40 bps higher than the reverse repo rate.
“The RBI is now focusing on increasingly channelising its liquidity operations, especially at the grassroots level,” RBI governor Shaktikanta Das said.
“A new term liquidity facility for the healthcare sector at the repo rate will aid in ramping up Covidrelated healthcare infrastructure and production and supply of essential healthcare products such as vaccines, oxygen and ventilators. It will also benefit patients burdened by unaffordable medical bills,” said Aashit Shah, Partner, J. Sagar Associates.
“The RBI has incentivised banks to offer these facilities by including them within the PSL targets of banks, and also permitting them to deposit the surplus liquidity up to an amount equal to their “Covid Loan” book with RBI at a rate which is 40 basis points higher than the normal reverse repo rate. This will ensure that banks accelerate the provision of liquidity for emergency healthcare services so that India is better equipped financially to deal with the pandemic,” he added.