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On-tap Liquidity Window for Contact-intensive Sectors and Enhancement of Exposure Threshold for Resolution Framework 2.0

04 th Jun 2021

The Managing Directors/CEO's/Owners/Director/Partners/General Managers
All Members of FHRAI

CC:   Executive Committee Members of FHRAI
         All Regional Associations

Sub: On-tap Liquidity Window for Contact-intensive Sectors and Enhancement of Exposure Threshold for Resolution Framework 2.0

Dear Member,

We are very happy to inform you that the continuous and focused efforts of FHRAI for the last 14 months to provide relief to the hugely distressed hospitality sector from the adverse impacts of Covid -19 have yielded some result today as the RBI Governor has announced two key measures of creating of On-tap Liquidity Window for Contact-intensive Sectors and Enhancement of Exposure Threshold for Resolution Framework 2.0.

Since beginning of the pandemic, FHRAI has been requesting to the Government to provide a special credit facility / working capital support for the hospitality sector with low rate of interest. We have also represented to the Government to remove the cap of Rs. 25 crores for restructuring, but the enhancement of maximum aggregate exposure to Rs. 50 crore is a welcome news for the beleaguered industry.

As per the announcement made by the RBI Governor today, a separate a separate liquidity window of ₹15,000 crores is being opened till March 31, 2022 with tenors of up to three years at the repo rate to mitigate the adverse impact of the second wave of the pandemic on certain contact-intensive sectors hotels and restaurants; tourism – travel agents, tour operators and adventure/heritage facilities; aviation ancillary services etc.

With a view to enabling a larger set of borrowers to avail of the benefits under Resolution Framework 2.0, The Government of India has decided to expand the coverage of borrowers under the scheme by enhancing the maximum aggregate exposure threshold from ₹25 crore to ₹50 crore for MSMEs, non-MSME small businesses and loans to individuals for business purposes.

A copy of the RBI Governors Statement dated 4th June 2021 us enclosed.

I would request the members to avail these facilities for having some relief from the turmoiled situation we are in today.

Although these measures are a welcome relief, however they are inadequate so as to fully deal with the severe stress & blow to our Industry. We shall continue to make efforts to seek further stimulus to the extent of employee payment support , waiver of statutory dues, introduction of a long term financial scheme for the hospitality sector, moratorium on loans and EMIs, expedite payments that are due to hotels under SEIS scheme being some of the reliefs we are seeking from the Government.

With best regards,

Gurbaxish Singh Kohli
Vice President
_____________________________________________________
The Federation of Hotel & Restaurant Associations of India
Regd. Off.: B-82, 8th Floor, Himalaya House, 23 K.G. Marg, New Delhi - 110 001
Tel.: 011-40780780, 40780718 (D), Fax: 011-40780777
Email: fhrai@fhrai.com, Website: www.fhrai.com

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THE FEDERATION OF HOTEL & RESTAURANT
ASSOCIATIONS OF INDIA

Address:

B-82, 8th Floor, Himalaya House, 23,
K. G. Marg, New Delhi-110 001

Telephone: 011-40780780

E-mail: fhrai@fhrai.com

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