Fidc Urges Rbi To Allow Nbfcs Avail ‘on-tap Tltro’ Scheme

FIDC urges RBI to allow NBFCs avail ‘On-Tap TLTRO’ scheme

Mumbai, Oct 23 : The Finance Industry Development Council (FIDC) has urged Reserve Bank of India Governor Shaktikanta Das to bring NBFCs under the ambit of the “On-Tap Targeted Long-term Repo Operations” (TLTRO) and allow them to benefit from the scheme.

 Fidc Urges Rbi To Allow Nbfcs Avail ‘on-tap Tltro’ Scheme-TeluguStop.com

The representative body of assets and loan financing NBFCs, in its letter to the central bank Governor, said that NBFCs are well recognised conduits for reaching out last mile credit to the crucial sectors.

NBFCs borrow only for the purpose of on-lending and hence, can act as a force-multiplier and join hands with the banking system in expanding the credit reach to various sectors.

Allowing banks to permit NBFCs to access these funds for targeted lending to the desired segments of the economy would significantly facilitate achievement of the RBI’s objective of launching this truly remarkable scheme, it said.

“We sincerely appeal to kindly consider our request to carve out a part of the On-Tap TLTRO funds for the NBFCs, including small NBFCs, to avail of loans from banks under the aforesaid scheme for the purposes of on-lending to the desired sectors only,” FIDC Director General Mahesh Thakkar said in the letter.

To provide banks with liquidity that can be used to support specific sectors, the RBI on Thursday conducted On-tap TLTRO on Thursday.

The operation was conducted for a total amount of up to Rs 1 lakh crore at a floating rate linked to the policy repo rate for up to three years tenor.

The scheme will remain operational from October 22 till March 31, 2021.

Sectors such as agriculture, agri-infrastructure, secured retail, micro, small and medium enterprises (MSMEs) and drugs, pharmaceuticals and healthcare have been earmarked as eligible for deployment of funds availed under ‘On-Tap TLTRO’.

The TLTRO is a type of operation which is generally conducted to relieve the banks from some of their debt repayment obligations towards bond holders.

Thus, it boosts cash flows emanating from the banking sector

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