Mumbai: The Reserve Bank on Wednesday decided to extend the 'TLTRO on Tap' liquidity scheme till September 30.
The scheme provides liquidity support for revival of activity in specific sectors that have both backward and forward linkages and having multiplier effects on growth. It was announced by RBI on October 9, 2020 and was earlier available up to March 31, 2021.
"With a view to increasing the focus of liquidity measures on revival of activity in specific sectors that have both backward and forward linkages and having multiplier effects on growth, the RBI had announced the TLTRO on Tap Scheme on October 9, 2020 which was available up to March 31, 2021.
On a review, it has now been decided to extend the TLTRO on Tap Scheme by a period of six months, i.e., till September 30, 2021," the monetary policy statement said.
In addition to the five sectors announced under the scheme on October 21 last year, 26 stressed sectors identified by the Kamath Committee were also brought within the ambit of sectors eligible under tap TLTRO on December 4, 2020 and bank lending to NBFCs on February 5, 2021.
"Liquidity availed by banks under the scheme is to be deployed in corporate bonds, commercial paper, and non-convertible debentures issued by entities in these sectors; it can also be used to extend bank loans and advances to these sectors," the statement said.
"Investments made by banks under this facility can be classified as held to maturity (HTM) even above the 25 per cent of total investment permitted to be included in the HTM portfolio. All exposures under this facility are exempted from reckoning under the large exposure framework (LEF)."