As announced in the Statement of Developmental and Regulatory Policies on October 09, 2020, it has been decided to conduct On tap Targeted Long-term Repo Operations of up to three years tenor for a total amount of up to ₹1,00,000 crore at a floating rate linked to the policy repo rate.

2. Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial paper and non-convertible debentures issued by the entities in specific sectors (Annex 1) over and above the outstanding level of their investments in such instruments as on September 30, 2020. Liquidity availed under the scheme can also be used to extend loans and advances to these sectors.

3. Investments made by banks under this facility will be classified as held to maturity (HTM) even in excess of 25 percent 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).

4. Operational details of the scheme are given in Annex 2.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/520

Annex 1

List of Eligible Sectors for Deployment of Funds Availed under On Tap TLTRO

a) Agriculture

b) Agri-Infrastructure

c) Secured Retail

d) Micro, Small and Medium Enterprises (MSMEs)

e) Drugs, Pharmaceuticals and Healthcare

Annex 2

The operational details of the On Tap TLTRO scheme are as under:

a) The Scheme will remain operational from October 22, 2020 till March 31, 2021.

b) All banks eligible under the Liquidity Adjustment Facility (LAF) can participate in the Scheme.

c) The Scheme will be operationalised on tap. Banks can place requests for funds in the format enclosed in Annex 3. The Reserve Bank will aggregate all such requests received and release funds every Monday (on the subsequent working day if Monday is a holiday) by initiating a 3-year repo contract with the requesting bank.

d) If a bank places multiple requests during the week, all such requests will be aggregated, and a single repo contract will be created on the date of operation.

e) In case the requested amount exceeds the remaining amount under the scheme on the date of operation, the remaining amount will be distributed on pro-rata basis among all the eligible requests.

f) The Reserve Bank reserves the right to decide the quantum of allotment and / or accept/reject any or all the requests, either wholly/partially, without assigning any reason thereof.

g) The eligible collateral and margin requirements will remain the same as applicable for LAF operations. The requesting bank must ensure that sufficient amount of securities is available in its Repo constituent account on the date of operation.

h) The amount utilised under the Scheme will be informed to market participants in the Money Market Operations (MMO) press release.

i) All other terms and conditions will remain same as the TLTRO scheme, including the clarifications issued in the form of Frequently Asked Questions (FAQs) on the subject.

j) All queries/clarifications regarding operational aspects of the facility may be directed to the Financial Markets Operations Department through e-mail and/or telephone (022-22630982). All technical issues may be directed to the e-Kuber Helpdesk through email (ekuberhelpdesk@rbi.org.in with a copy to laffmd@rbi.org.in) and/or telephone (022-27595662/67/022-27595591 /92/93/94).