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The Reserve Bank takes 'this big step' to deal with the serious challenge of lock down

Tuesday - March 24, 2020 12:00 pm , Category : WTN SPECIAL
Many major decisions can be taken by the Reserve Bank of India due to lock down
Many major decisions can be taken by the Reserve Bank of India due to lock down

Reserve Bank to circulate one lakh crore rupees in the banking system to remove cash shortage in the market


MARCH 24 (WTN) - The global epidemic that has spread from the city of Wuhan in China has caused a panic across the world due to Coronovirus. The Coronovirus epidemic has spread to more than 190 countries of the world. So far, more than 16,000 people have died worldwide due to the Coronovirus infection. As far as India is concerned, 10 people have lost their lives due to Coronovirus in India.

There is a lock-down situation across India due to the Coronovirus. In such a situation, economic activities have come to a standstill across the country. The situation of lock down is very worrying for the Indian economy already facing the economic slowdown. But everyone is scared of death. In such a situation, economic activity has come to a standstill across India due to the Coronovirus. The Central Bank of India, the Reserve Bank of India, has taken some important steps to deal with this biggest crisis in the economy so that the Indian economy can be supported to a great extent.


For your information, let us know that the Reserve Bank has announced the release of additional funds of Rs 1 lakh crore in the banking system, considering the difficult circumstances of pressure on financial markets due to the stalled traffic caused by the lock-down and curfew. Not only this, but the Reserve Bank says that it plans to leave even more money in the banking system when needed.


Let us know that the Reserve Bank of India has released the first installment of Rs.50,000 crore on Monday under the long-term repo arrangement of government securities. At the same time, the second installment of the same amount will also be released at the time of need. According to the Reserve Bank, such measures are already being taken to meet the need for cash in any way. At the same time, the central bank of the country says that due to the economic activity stalled due to the Coronavirus, these necessary steps are being taken to overcome any kind of cash crunch.


In fact, to prevent the shortage of cash in the banking system, the Reserve Bank of India has decided to auction a variable repo rate of Rs 1 lakh crore. According to the Reserve Bank, this effort will make the funds available to the banks at a cheaper rate. Also, this step will also ensure the availability of cash in the banking system. For your information, let us know that there will be a sudden need of the cash in the market when the curfew or lock-down is over, so the Reserve Bank has already started taking the precaution by providing necessary cash to the banking system.


It is clear that the Reserve Bank's move will remove the cash shortage of the banking system, and provide a major relief to the economy that has been disrupted due to lock-downs and curfews. Actually, keeping in view the conditions of the corono virus in India, it can be said that the economic situation in the country may not be normal until 15 April. In such a situation, the Reserve Bank has made the availability of cash in the banking system with a prudent decision. However, after the lock-down and curfew, the Reserve Bank will face many challenges such as declining GDP, rising inflation and stalled economic output. In such a situation, it is to be seen now how the Reserve Bank deals with these major challenges.