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Home » IANS » Now 26 stressed sectors to be eligible for on-tap TLTRO

Now 26 stressed sectors to be eligible for on-tap TLTRO

By IANS
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Mumbai, Dec 4 (IANS) The Reserve Bank of India (RBI) has decided to bring the 26 stressed sectors identified by the K.V. Kamath Committee under the ambit of on-tap targeted long-term repo operation (TLTRO).

So far five sectors were eligible for the scheme as announced on October 21, 2020.

RBI on Friday said that banks are encouraged to synergise the two schemes by availing funds from RBI under on tap TLTRO and seek guarantee under ECLGS 2.0 to provide credit support to stressed sectors.

“Liquidity availed by banks under the scheme should be deployed in corporate bonds, commercial papers, 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,” said the RBI’s statement on developmental and regulatory policies.

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 will 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 will also be exempted from reckoning under the large exposure framework (LEF)

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 will be available up to March 31, 2021.

Accordingly, it was decided to conduct on tap TLTRO with tenors of up to three years for a total amount of up to Rs 1,00,000 crore at a floating rate linked to the policy repo rate with flexibility to enhance the amount and period after a review of the response to the scheme.

As part of Atmanirbhar Bharat Package 3.0 announced on November 12, 2020, the Central Government launched Emergency Credit Line Guarantee Scheme 2.0 under which the corpus of Rs 3.0 lakh crore of existing ECLGS 1.0 was extended to provide 100 per cent guaranteed collateral free additional credit to entities in 26 stressed sectors.

–IANS

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(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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