If a tweet was all that was allowed to understand the Reserve Bank of India’s (RBI’s) announcement on Friday, it would read like this: RBI says ‘lend’ to banks. Banks say: you are safer, we keep our money with you and big companies that are already liquid. RBI reduces the interest on money banks keep in the central bank (reverse repo down by 25 basis points), RBI gives ₹50,000 crore to banks through targeted long-term repo operations or TLTRO 2.0, and another ₹50,000 crore to Small Industries Development Bank of India (Sidbi) and National Bank for Agriculture and Rural Development (Nabard) to lend to microfinance institutions (MFIs) and non-banking financial companies (NBFCs).
None of us know how to deal with the Chinese virus. We are used to dealing with disastrous events in our lives and in the country. Bomb blasts, a tsunami, torrential rain and flooding, Pakistani terrorists locking down Mumbai as they hole up in South Mumbai killing and destroying, floods, droughts – these have all happened over the past few years in increasing frequency. But these events are localized. They have a devastating impact that is short term and does not affect the rest of the country. A pandemic is not something any of us have dealt with. It is scary because we can’t see the danger. It is like that game where you don’t know under which square the bomb will explode. Did that handshake with the visitor put me at risk? Did the metro ride the other day coincide with the virus case we heard about? Will India move from stage two to stage three putting millions at risk? Oh no, somebody in our locality has been confirmed positive!