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The Reserve Bank of India (RBI) has extended the on-tap Targeted Long Term Repo Operations (TLTROs) scheme by three months till December 31, 2021.
This is in view of the nascent and fragile economic recovery.
The RBI had, on October 9, 2020, first announced that it will conduct 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. The scheme was available up to March 31, 2021, but was later extended.
Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial papers, and non-convertible debentures issued by the entities in five specific sectors. This scheme was further extended to stressed sectors identified by the Kamath Committee in December 2020 and bank lending to NBFCs in February 2021.
The liquidity availed under the scheme can also be used to extend bank loans and advances to these sectors.
Investments made by banks under this facility are classified as held to maturity (HTM), even in excess of 25 percent of total investment permitted to be included in the HTM (held to maturity) portfolio.
All exposures under this facility will also be exempted from reckoning under the large exposure framework (LEF).
As per RBI data, under on-tap TLTRO, banks had availed ₹5,000 crore on March 22, 2021, and ₹320 crore on June 14, 2021.
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