RBI Policy: Stressed firms get longer access to dedicated liquidity window

India’s central bank extended the on-tap Targeted Long Term Repo Operation (TLTRO), a dedicated liquidity window, by another three months. Companies from stressed sectors can now avail the facility until December 31 this year. The plan was introduced in December last year for companies facing a cash crunch.

“Given the nascent and fragile economic recovery, it has now been decided to extend the on-tap TLTRO scheme further by a period of three months, i.e., until December 31, 2021,” said the Reserve Bank of India (RBI) while announcing the bi-monthly policy Friday.

Companies availed Rs 5,320 crore between March 22 and June 14, show the latest RBI data. This was typically three-year money for which the central bank would charge a 4% rate of interest.


Stressed sectors identified by the KV Kamath Committee were also brought within the ambit of the scheme on December 4, 2020, and subsequently bank lending to NBFCs was also included on February 5, 2021. On April 7, the scheme was extended by a period of six months - until September 30 this year.

With a view to increasing the focus of liquidity measures on revival of activity in specific sectors that have both backward and forward linkages with having multiplier effects on growth, the RBI had announced the scheme on October 9, 2020, for five sectors.