RBI proposes to extend On-tap Liquidity Window for Contact-intensive Sectors till June 30

10 Feb 2022 , 11:49 AM

In the last bi-monthly monetary policy of FY22, RBI proposes to extend On-tap Liquidity Window for Contact-intensive Sectors to June 30, 2022.

Last year, on June 04,  it was decided to open a separate liquidity window of Rs15,000cr at the repo rate with tenors of up to three years available till March 31, 2022, for certain contact-intensive sectors.

By way of an incentive, such banks were eligible to park their surplus liquidity up to the size of the COVID-19 loan book, created under this scheme with the RBI. The amount in this COVID-19 loan book attracted a rate that is 25 bps lower than the repo rate or, termed differently, 40 bps higher than the reverse repo rate.

Under the scheme, banks desirous of deploying their resources without availing funds from the RBI under the scheme for lending were also eligible for this incentive.

Banks have deployed their funds to the tune of Rs5,041cr (up to February 4, 2022) to the entities under the contact intensive sector.

Following the banks’ fund deployment, the scheme is now proposed to be extended till June 30, 2022.