RBI’s G-SAP program will support government’s loan scheme, investors will get big relief

reserve Bank

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The Reserve Bank of India will purchase government securities worth Rs 1 lakh crore in the current quarter i.e. the first quarter of FY 2022 under the G-SAP 1.0 program.

new Delhi. The Reserve Bank of India (RBI) has decided not to make any changes in the repo rate in the meeting of the Monetary Policy Committee (MPC). RBI did not make any change in policy rates for the sixth consecutive time on Wednesday. After a three-day meeting on Wednesday, RBI Governor Shaktikanta Das said, ‘There has been no change in the repo rate and reverse repo rate by the RBI. It is maintained at the rate of 4 percent.

Since last year, the focus of RBI is on the liquidity front. RBI wants to ensure that the loan scheme of the government is completed without any problem. In this effort, RBI has announced G-SAP 1.0 (Government Security Acquisition Program). Under this program, RBI will buy government securities worth Rs 1 lakh crore in the current quarter i.e. the first quarter of FY 2022.

Bond investors will get big relief
RBI has also said that this Rs 1 lakh crore bond purchase scheme is different from the current OMO bond purchase scheme of RBI, that is, it is not included. In view of supply synergio, this announcement of RBI is going to give a lot of relief, it is expected to fall in bond yield. The RBI’s goal of supporting bond yields and their gradual growth can provide major relief to bond investors.Also read: Corona’s havoc! Debt-GDP ratio rises to 90 per cent, increase in country’s debt

Everyone welcomed the decision of RBI
Major bankers of the country have appreciated the measures taken in the first monetary policy of the Reserve Bank of the new fiscal year. Bankers have described the steps taken in the right direction by making cash available in the banking system and other measures to increase the growth of the central bank through the Government Securities Procurement Program (G-SAP).

Union of Banks Indian Banks Association chairman Raj Kiran Rai said that the announcement made in the direction of cash management from the one lakh crore rupees bond purchase program (G-SAP) is an important aspect for banks. Raj Kiran Rai is also the head of Union Bank of India. He said that other measures like expansion of targeted long-term repo operations (TLTRO) scheme, providing additional funds to All India Financial Institutions would also prove to be helpful for banks.

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