RBI to conduct SLTRO of Rs 10,000 crore
“The first auction, for Rs 10,000 crore, will take place on May 17, 2021. Every subsequent auction will carry forward the unutilized portion of the notified Rs 10,000 crore until it is completely utilised or until the last auction, whichever comes first “It was said.
The Reserve Bank of India(RBI) announced on Friday that the first auction for Rs 10,000 crore in special long-term repo operations (SLTRO) for Small Finance Banks (SFBs) would take place on May 17.
The RBI has agreed to conduct an SLTRO of Rs 10,000 crore at the repo rate for the SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower, to provide additional assistance to small business units, micro and small businesses, and other unorganised sector organisations adversely affected during the current wave of the pandemic. Until October 31, 2021, the facility will be open.
The Reserve Bank of India said in a statement that it would hold one special long-term repo operation (SLTRO) auction every month.
“The first auction, for Rs 10,000 crore, will take place on May 17, 2021. The unspent portion of the notified Rs 10,000 crore will be carried forward in each subsequent auction until it is completely used or until the last auction, whichever comes first,” it said.
The Small Finance Banks(SFBs) taking part in the scheme must ensure that the money lent from the RBI is still backed up by lending to the required segments before the SLTRO matures.
Furthermore, SFBs should make every effort to lend within 30 days of receiving funds from the RBI.
The central bank stated that if the notified sum is oversubscribed, the allotment would be performed on a pro-rata basis.
The minimum bid number will be one crore rupees and multiples of that amount.