RBI announces on tap targeted long-term repo operations

All exposures under this facility will also be exempted from reckoning under the large exposure framework (LEF), the central bank said.

Oct 22, 2020 08:10 IST India Infoline News Service

Reserve Bank of India
As announced in the Statement of Developmental and Regulatory Policies on October 09, 2020, it has been decided to conduct On tap Targeted Long-term Repo Operations of up to three years tenor for a total amount of up to Rs1,00,000cr at a floating rate linked to the policy repo rate, as per RBI.

Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial paper and non-convertible debentures issued by the entities in specific sectors over and above the outstanding level of their investments in such instruments as on September 30, 2020. Liquidity availed under the scheme can also be used to extend loans and advances to these sectors.

Investments made by banks under this facility will be classified as held to maturity (HTM) even in excess of 25% of total investment permitted to be included in the HTM portfolio.

All exposures under this facility will also be exempted from reckoning under the large exposure framework (LEF), the central bank said.

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