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Friday, 20 March, 2020, 11 : 00 AM [IST]

Govt, RBI working on relief measures for aviation, tourism sectors

The Centre and the Reserve Bank of India (RBI) will soon announce measures for businesses to deal with uncertainty caused by COVID-19 outbreak, reports Shreya Nandi in Mint.

"The Centre has finalised a host of measures to support industries (hit by the pandemic), which may include relaxation of bad loan rules. The priority right now is to ensure that the Budget is passed in the Parliament before April," a senior government official told Mint, adding that decision on relaxing regulatory norms for bad loans, however, will have to be taken by the RBI.

"The idea is to ensure that there is no liquidity or cash flow crunch," the official said. These measures will be announced as soon as the Union Budget is passed

The Finance Ministry will have to get the Budget passed in the Parliament by March 31 so that tax changes can kick in from the start of the next financial year. After the Budget is passed, respective departments can start spending the funds allocated to them.

Along with this, the passage of Appropriation Bill 2020-21 is also crucial. The Lok Sabha on Monday passed the Bill, which authorises the government to draw funds from the Consolidated Fund of India for its working as well as implementation of its programmes and schemes.

Meanwhile, Indian Banks’ Association (IBA) has asked banks to assess the impact of outbreak on sectors that have been hit the most - aviation, tourism.

IBA met heads of all banks on Monday to discuss the challenges of the businesses and the lenders amid the COVID-19 pandemic.

Sunil Mehta, CEO, IBA told Mint that different sectors--aviation, tourism, among others--need different relief measures and the Association has asked lenders to come back with data and relevant assessment in a week’s time.

“Thereafter, we can finalise and send our recommendations to the RBI," Mehta said.

Mehta also said banks have been asked to keep a pool for critical services such as treasury and internet banking, in case the outbreak intensifies, along with advisories for staff and customers to minimise the economic fallout of the viral disease.

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