Amid a spurt in coronavirus cases, the Reserve Bank of India (RBI) will be conducting one special long-term repo operation (SLTRO) for small finance banks (SFB) for each month, totalling Rs10,000-crore.
Small finance banks (SFB) are key to provide the last mile supply of credit to individuals and small businesses, and in a bid to provide liquidity support to small business units amid the raging second wave of the COVID-19 pandemic, the RBI on Wednesday announced special long-term repo operations for small finance banks. Loans up to 1 mln rupees per borrower can be given under the scheme, and it will be open till Oct 31.
The fresh lending can be done for loans of up to Rs 10 lakh. There will be no tenor restriction regarding lending by SFBs under the scheme.
The unutilized portion of the notified amount will be carried forward in each subsequent auction until fully utilized or till the last auction, whichever is earlier. Accordingly, if needed, the RBI will conduct special long-term repo operations for the residual amount on Jun 15, Jul 15, Aug 17, Sep 15, and Oct 14.