RBI to provide liquidity supportto housing, export sectors

Kolkata, Dec.11 (ANI): The Central Board of the Reserve Bank of India today decided to provide liquidity support to the housing and export sectors adversely affected by the recent financial market developments.

At the Central Board meeting held in Kolkata, the RBI decided to provide a refinance facility of Rs 4000 crore to the National Housing Bank under the provisions of Section 17 (4DD). This refinance will be available against NHB's loans and advances to housing finance companies. The facility will be available at the prevailing repo rate for a period of 90 days. The facility will be available up to March 31, 2010.

The RBI also decided to provide a refinance facility to the EXIM Bank to the tune of Rs 5000 crore to mitigate pressures on loan disbursements to Indian exporting companies and for honouring disbursements under export lines of credit extended at the behest of the Government of India to overseas financial institutions, sovereign governments and other entities for financing imports from India.

RBI Governor D Subbarao said the global crisis was still developing and no one had the big picture yet but there was no denying the enormity of the meltdown and its repercussions on India. He said the RBI will continue to closely monitor the developments in the global and financial markets and will take swift and effective action as appropriate.

The RBI Board meeting was held to review key economic, monetary and financial developments and the various steps taken since mid-September 2008, to preserve financial stability and arrest the moderation in the growth momentum in the context of the ongoing global financial crisis and the deepening recession in major economies of the world. By Ajitha Menon (ANI)