0

0

0

0

0

0

0

0

0

This article is more than 1 year old.

RBI launches long-term repo operations worth Rs 50,000 crore to help NBFCs

Mini

"The TLTROs will be launched in tranches of appropriate sizes," Das said while announcing a series of steps to help revive the Indian economy in view of the ongoing coronavirus crisis.

RBI launches long-term repo operations worth Rs 50,000 crore to help NBFCs
The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said the central bank would launch long-term repo operations (TLTROs) worth Rs 50,000 crore to help non-banking financial companies (NBFCs), which have been suffering on account of tight cash conditions.
"The TLTROs will be launched in tranches of appropriate sizes," Das said while announcing a series of steps to help revive the Indian economy in view of the ongoing coronavirus crisis.
"Based on assessment, the RBI will increase the size of the TLTRO," he added.
TLTRO auction of Rs 25,000 crore will be conducted on Friday, according to RBI governor.
Money raised via TLTRO-2, Das said, will be invested in investment-grade bonds companies and at least half of the funds should go to small NBFCs and MFIs.
Das further said RBI will ensure adequate liquidity in the system to ease the financial stress caused by the COVID-19 pandemic.
Industry experts hailed RBI's announcement.
"The targeted long term repo operations (TLTRO) for the NBFC will help in addressing their liquidity pressures," said Zarin Daruwala, CEO, India, Standard Chartered Bank.
Rajnish Kumar, Chairman, SBI and Chairman echoed same views.
"This will clearly allow NBFCs and MFIs to benefit," he said.
"The Rs 50,000 crore lent to small and mid investment grade NBFCs would indirectly benefit the retail investors. As, with the relief from current liquidity crunch, the NBFCs would be eager to lend and hence stay upbeat," said Pranjal Kamra, CEO, Finology.
"We hope that the additional liquidity of Rs 50,000 crore will give the much needed support to the businesses especially SMEs and the agricultural sector. This will be beneficial for the economy as a whole," added Palka Chopra, Senior Vice President, Master Capital Services.
Besides, RBI announced a re-financing window of Rs 50,000 crore for financial institutions like Nabard, National Housing Bank and Sidbi.
The central bank also reduced the reverse repo rate - the rate at which banks park their fund with the central bank - by 25 basis points to 3.75 percent.
next story