Hospitality and tourism sector welcomes RBI announcement of liquidity measures

AgenciesUpdated: Friday, June 04, 2021, 11:02 PM IST
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Hospitality and tourism sector welcomes RBI announcement of liquidity measures | Image by bottlein from Pixabay

The hospitality and tourism sector on Friday welcomed the decision of the Reserve Bank of India (RBI) to open a separate liquidity window of Rs 15,000 crore for contact-intensive sectors like hotels and restaurants, tourism and aviation ancillary services, hit hard by the pandemic.

"This is the first significant sign indicating that the government has taken note of the severe effect that the pandemic has had on the hospitality industry and the huge economic impact it will have on the sector as well as the nation," FHRAI Vice President Gurbaxish Singh Kohli said.

Infusing liquidity will provide the much-needed support to cash-strapped hospitality businesses without which the industry couldn't have survived, he added.

The separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022, with tenors of up to three years at the repo rate.

However, Federation of Hotel & Restaurant Associations of India (FHRAI) is of the view that the tenure tenure should be for at least 5 years as a duration of 3 years is just not sufficient to recover from the financial turbulence that the industry is going through, Kohli said.

Echoing similar views, Hotel Association of India Vice President KB Kachru said the liquidity window is a major relief to the hospitality sector which has been reeling under the devastating impact of the ongoing pandemic.

"Hotels, recognised as one of the most stressed sectors, have been requesting for such a relief to be provided urgently," Kachru said.

It has given an additional lease of life to several hospitality establishments that are on the brink of closure. Ailing hotels will be able to save related jobs, lives and livelihoods. Hotel loans are less likely to become NPAs, he added.

Indian Association of Tour Operators (IATO) President Rajiv Mehra said, "We welcome the announcement by the RBI offering loans to the tourism and hospitality sector on easy terms and lower rate of interest. Hope tour operators who have had almost zero income for past more than one year, would get some succour out of it".

Cheering RBI's move, OYO India & South-East Asia CEO Rohit Kapoor said, "The past few months have been tough on the cash-strapped small and independent hotels and homeowners and this decision will provide a fillip to ease the financial pressure on them." Under the special liquidity scheme, banks can provide fresh lending support to hotels and restaurants; tourism - travel agents, tour operators and adventure/heritage facilities; aviation ancillary services - ground handling and supply chain, among others.

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