Mumbai: In a bid to support revival of sectors hit most by the COVID-19 pandemic, Reserve Bank of India (RBI) on Friday decided to open a separate liquidity window of Rs 15,000 crore for certain contact-intensive sectors like hotels and restaurants, tourism, aviation ancillary services, beauty parlours and saloons.
This facility will be operational from Monday. It will be open till March 31, 2022.
This credit window is in addition to on-tap liquidity facility of Rs 50,000 crore with tenors of up to three years at the repo rate till March 31, 2022 to boost provision of immediate liquidity for ramping up COVID-related healthcare infrastructure and services in the country. This was announced on May 5.
"In order to mitigate the adverse impact of the second wave of the pandemic on certain contact-intensive sectors, a separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022, with tenors of up to three years at the repo rate," RBI Governor Shaktikanta Das said while announcing the bi-monthly monetary policy.
Under the scheme, banks can provide fresh lending support to hotels and restaurants; tourism – travel agents, tour operators and adventure/heritage facilities; aviation ancillary services – ground handling and supply chain; and other services that include private bus operators, car repair services, rent-a-car service providers, event/conference organisers, spa clinics, and beauty parlours/saloons, he added.
Hospitality industry welcomes the decision
The Federation of Hotel & Restaurant Associations of India (FHRAI) said this new facility will provide the much-needed support to cash-strapped hospitality businesses without which the industry couldn't have survived
"This is the first significant sign indicating that the government has taken note of the severe effect that the pandemic has had on the hospitality industry and the huge economic impact it will have on the sector as well as the nation," FHRAI Vice President Gurbaxish Singh Kohli said.
However, the FHRAI is of the view that the tenure should be for at least 5 years as a duration of 3 years is just not sufficient to recover from the financial turbulence that the industry is going through, he added.
Echoing similar views, Hotel Association of India Vice President KB Kachru said the liquidity window is a major relief to the hospitality sector which has been reeling under the devastating impact of the ongoing pandemic.
"Hotels, recognised as one of the most stressed sectors, have been requesting for such a relief to be provided urgently," Kachru said.
(With Agency Inputs)
