NEW DELHI: The Reserve Bank of India (RBI) on Friday said banks should lend to stakeholders in the COVID-related healthcare infrastructure and services within 30 days from the date of availing funds under the Rs 50,000 crore liquidity window.
According to the scheme, while there is no tenor restriction, lenders will have to ensure that the amount borrowed from the central bank is backed by lending to the specified segments until the scheme's maturity.
The scheme, which opens an on-tap liquidity window of Rs 50,000 crore for banks with tenors of up to three years at the repo rate till March 31, 2022, seeks to boost immediate liquidity, ramping up India’s Covid-related healthcare infrastructure and services. The scheme will remain operational from May 07, 2021, till March 31, 2022.
According to Crisil Ratings analysts, liquidity window can help augment the bed capacity at hospitals by up to 20 per cent as credit will be available at cheaper costs. The agency said 354 companies it rates, with an aggregate bank exposure of Rs 40,000 crore, will be eligible for such loans.
Pharmaceutical firms account for 68 per cent of the rated bank exposure, but hospitals (24 per cent of rated exposure) are likely to avail majority of the funding available. Currently, hospitals pay up to 11 per cent in interest on their borrowings, and the new loans under the new schemes will be cheaper by up to 3.5 per cent, its chief ratings officer Subodh Rai said.
Pharma players won’t be keen to avail credit under this scheme because they already borrow money at much lower costs of 8-8.5 per cent. Banks could also park their surplus liquidity up to the size of the Covid loan book they build in a special 14-day reverse repo window. RBI will offer 40 basis points higher interest than the current reverse report rate on such liquidity.
Besides, lenders are being incentivised for quick credit delivery as these loans will now be classified as priority sector lending.Analysts, however, warn that missing risk appetite among lenders may cap gains from the liquidity boost. The observation comes from the fact that despite the massive liquidity boost last year, credit offtake had plunged to a 59-year-low of 5.6 per cent in FY21.