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The RBI has extended the deadline of the on-tap Targeted Long-Term Repo Operation (TLTRO) scheme by six months up to September 30,to increase the focus of its liquidity measures on revival of activity in specific sectors.
To nurture the revival of activity in sectors that have multiplier effects on growth, the Reserve Bank had announced on-tap TLTRO with tenors of up to three years for a total amount of up to ₹1-lakh crore at a floating rate linked to the policy repo rate in October 2020.
The liquidity availed by banks under the scheme is to be deployed in corporate bonds, commercial paper, and non-convertible debentures issued by the entities in five sectors (agriculture, agri-infrastructure, secured retail, micro, small and medium enterprises/ MSMEs, and drugs, pharmaceuticals and healthcare) over and above their investments in these instruments as on September 30, 2020.
Moreover, to enable banks to exploit the synergies between central bank liquidity under on-tap TLTRO scheme and the Emergency Credit Line Guarantee Scheme 2.0 (ECLGS 2.0) of the Central government, the RBI expanded the scope of the on-tap TLTRO in December 2020 to all stressed sectors identified by the Kamath Committee, in addition to the five sectors announced earlier in October 2020.
In February 2021, the RBI allowed lending by banks to NBFCs under the TLTRO on-tap scheme for incremental lending to specified stressed sectors.
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