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RBI Eases Fund Flow for Cash-Starved Real Estate Sector

Published on April 17, 2020
Current Context: On 17th April 2020, RBI launched the second tranche of liquidity-easing measures to facilitate credit flow to the real estate sector, which has come to a standstill as the country is facing a lockdown situation due to coronavirus.
RBI Eases Fund Flow for Cash-Starved Real Estate Sector
  • RBI governor Shaktikanta Das announced TLTRO of Rs 50,000 crore, saying the funds availed by banks should be put in investment-grade bonds companies and at least half of the funds should go to small non-banking financial companies (NBFCs) and microfinance institutions (MFIs).
  • It RBI has allotted Rs 10,000 crore to National Housing Bank.
  • The reverse repo rate has been reduced and currently, it is 3.75%. This step in the reverse repo rate will now enable banks to lend even more.
  • The RBI has also extended the date of commencement of commercial operations (DCCO) of project loans for commercial real estate projects that are delayed for reasons beyond the control of promoters. This will bring much-needed relief to cash-starved developers.

Question:

Q.1 What is the current reverse repo rate declared by RBI on 17th April 2020?
a. 3.50%
b. 4%
c. 3.75%
d. 3.25%
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