The second wave of Covid in India will compel Reserve Bank of India (RBI) governor Shaktikanta Das to stick to an accommodative monetary policy even as he is expected to announce a status quo on policy rates on Wednesday.The accommodative stance is expected to be buttressed by long-term repos and the purchase of government bonds from banks. Adding to the dovishness in the RBI’s stance would be a likely reduction in inflation forecast.According to a Bank of America global research, a month of nationwide lockdown costs 100-200 basis points (100bps = 1 percentage point) of gross domestic product (GDP), “given the high economic cost”. The research report by Bank of America Securities said that it expects the RBI to infuse liquidity through a combination of bond purchases, long-term repo operations and by allowing banks to hold more bonds to maturity, thereby reducing the risk of having to provide for lower valuations.HSBC’s India economist Pranjul Bhandari feels that the second wave will result in GDP growth numbers in FY22 being more evenly spread. Earlier, a growth spike was expected in the first half because of the base effect resulting from the lockdown in Q1FY21. “We think new growth impulses will be delayed, not lost. To be sure, even if the pace of economic rebound has softened a bit, it is already at elevated levels. The services-led growth, which could have pushed activity higher from here, will perhaps now be realised in its entirety in the second half of FY22 instead of the first half,” said Bhandari in her report.Among the development measures, the RBI is expected to unveil guidelines that will facilitate some of the measures announced by the finance minister in the Union Budget in February this year. One of these measures is the creation of a National Asset Reconstruction Company (ARC) by public sector banks. Since the RBI is not in favour of revising rules based on ownership, it is likely to rejig the norms for ARCs.The finance minister has in the Budget announced measures to support digital payments. The central bank had last year announced the operationalisation of the payment infrastructure development fund and is now likely to review the same. The RBI has been working hard to bring onshore the trade-in rupee derivatives (non-deliverable forwards). More measures to deepen this market are likely to be taken.Earlier this month, the central bank had expressed its displeasure with banks over their inability to prepare themselves for a new regime of bank-led authentication of recurring card payments. While the RBI has extended the deadline for compliance, it could come out with a framework for penalising non-compliance.