RBI Steps In To Boost Fintech

CIOReviewIndia Team | Thursday, 12 March 2020, 11:35 IST

                                     RBI Steps In To Boost Fintech

As coronavirus gets officially labeled as a pandemic by WHO, it is showing its impact in all industry sectors. Like all segments, Fintech sector is also not immune to it. The virus outbreak in the country has resulted in the market fall and therefore the country’s central bank is in the plans of announcing liquidity boosting measures to help stabilize financial markets.  

With the Indian stock market’s nosedive on Thursday, witnessing the blue-chip Nifty 50 sliding to its lowest in over two and a half years, it is a necessary action to be taken. After the coronavirus outbreak was termed an epidemic and the United States suspended travel from Europe, the markets have so far recovered some losses after the news with Nifty 50 and S&P BSE Sensex down over 6 per cent.

Coming to the rescue and looking to galvanize the fintech sector, RBI has plans to boost liquidity. This is being expected in light of the fact that an off-cycle interest rate cut would not be feasible.  As the market has been expecting an off-cycle interest rate cut by the Reserve Bank of India but a Reuters source said no such step is being pondered at this point in time. “The RBI will look to push more liquidity and ease repayment issues to sectors that have been disrupted by supply chains being broken down,” the source said.    

As far as RBI’s monetary policy is concerned, the committee is scheduled to convene on March 31, according to its website.  A rate decision is likely to be taken by the RBI before its scheduled meeting, the officials said. The inability of RBI to be able to cut its policy rates can be attributed to a sharp rise in retail inflation in the last few months. However, amid uncertainty about how the coronavirus will spread, the RBI said it would act accordingly and expressed its willingness to ease monetary policy further, while persistent high inflation could make it difficult for it to act.

Desperate times call for desperate measures. The total number of confirmed cases of coronavirus rose to 73 in India, according to government and travel visas have been suspended henceforth. 

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