Financial system has surplus liquidity

2 min read
  1. Finance Minister and RBI Governor has met for the customary post-budget meeting.
  2. The RBI Governor has said that the system has sufficient liquidity and the Union Budget has made provisions to ease the NBFC crisis.
  3. In the Budget,the Government has announced a one-time six-month partial credit guarantee window to cover up 10% of losses that public sector banks(PSBs) may incur after buying high-rated pooled assets of NBFCs.
  4. The RBI governor has praised the recapitalisation of banks with Rs 70,000 crore.The banking system has been suffering from low liquidity and has been seeking recapitalisation from the government.
  5. RBI Governor has also said he expects a quicker transmission of the interest rate cuts by banks to consumers by way of cheaper home,auto and personal loans.
  6. Further,he also said that the issue of RBI dividend will be decided by the board.The government has budgeted a dividend from the Reserve Bank of India amounting to about ₹90,000 crore.