While the world tries to come to grips with a pandemic, a crack team from the Reserve Bank of India (RBI) has been reportedly working from a remote location to ensure the country’s financial system stays immune to Covid-19, the rogue virus that has claimed over 10,000 lives across the world so far.
According to a Business Standard report, the team, of about 150 people and from critical RBI wings like debt, reserve management, is part of the central bank’s business continuity plan to ensure Covid causes minimum disruption to the financial system.
The team, the report added, has been on it since March 19. This, according to another Mint report, is first such measure undertaken by the Central bank that will ensure that key information technology (IT) services for the delivery of digital banking, treasury services and cheque clearance are not disrupted by the outbreak, and also ensure the smooth running of RBI functions from secured data centres as nearly 14,000 staffers, except senior-most management, reportedly work from home.
The BS report claims the team has been split into two. While one runs the checks, the other is on standby.
The central bank has hired a hotel in the vicinity of the primary data centre to accommodate the team, the Business Standard reported. Support staff of the hotel, comprising maintenance, security, kitchen, front desk, and administration, have also been isolated.
India’s central bank on Friday walked the talk on doing whatever it takes to contain the economic impact of Covid-19 by injecting more liquidity just days after Governor Shaktikanta Das cemented Mint Road’s credentials as a responsive regulator, assuring the man on the street about the safety of his savings at Yes Bank.
Since the last meeting of policy makers about six weeks ago, the Reserve Bank of India (RBI) has cumulatively infused about Rs 2.5 lakh crore of liquidity in the banking system even as financial assets across the globe are roiled by an unprecedented lockdown that seeks to restrain the virus from proliferating. On Friday, RBI decided to buy another Rs 30,000 crore of bonds through open market operations (OMO), saying the operations will be conducted in two tranches.
Just three days earlier, it had announced first OMO purchase in the last two months for Rs 10,000 crore.
The first auction will take place next Tuesday when a set of four bonds – maturing in three, five, six and nine years – are traded.
“On a review of the current liquidity and financial conditions, the RBI has decided to conduct purchase of government securities under OMOs for an aggregate amount of Rs 30,000 crore in two tranches,” the central bank said.
The latest announcement of OMOs should help maintain stability in the exchange rate.
In its February bi-month policy, RBI had first announced long-term repo operations (LTRO) to infuse rupee liquidity of Rs 1 lakh crore. In an unscheduled press conference earlier this week, the central bank again announced a similar measure – of the same quantum.
Later, RBI conducted a dollar-swap auction for $2 billion where it injected dollar liquidity. Similar operations will be conducted next Monday.
The RBI has taken a different approach from other central banks, including the Federal Reserve and the Bank of England, which slashed interest rates. The RBI on the other hand has been pushing liquidity to ensure that the interbank market doesn’t freeze and that banks are in a comfortable position.