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Yes, I would agree with that. These are constructive in the right direction as you put it. On the liquidity front, RBI has done a fair bit in terms of ensuring that there is enough liquidity in the system. The additional LTRO which has been announced is Rs 50,000 crore. The next is the additional amount of money which is going to be given to NABARD, SIDBI and NHB; NHB, for example, gets Rs 10,000 crore. The reduction in the reverse repo rate would make it less attractive for banks to give the money back to RBI and they would be more tempted to lend money in the system; so these are all very good steps.
The restructuring of loans to NBFCs was a necessary thing. This is just an extension of the commencement date circular. Couple of things were not very clear to me, like for example, this 10% additional provisioning to be done over two quarters for loans where moratorium has been sought; it is one such issue. The other one was on no dividend payout by banks for the year ended March 2020. So I think these are the two things one has to understand better.
Do you think the size of LTRO2 is slightly less? Rs 50,000 crore is not a large number. Secondly, also in the retail front, let us say for home borrowers and credit card holders; now the lockdown has been extended. Do you think the moratorium period could have been extended let us say by another month or 45 days more?
Look at this moment I think options are still on the table in the sense that the governor has said that if it is necessary to breach the LTRO going forward, we will do so. Also, as far as the moratorium is concerned, I am sure if the lockdown gets extended beyond May, that is something RBI can look at. But at the moment that will not be necessary. Hopefully by the end of June, all this could be reviewed and that is something which can come later.
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