RBI to Conduct On-tap TLTRO Worth Rs 1 Lakh Crore for Liquidity in Banking System

The move will help banks to plan their investments in SLR securities in an optimal manner, he said. Governor said the two measures — OMOs in SDL and the extension of HTM till March 2022– should ease concerns about illiquidity and absorptive capacity for the total government borrowing in the current year. Commenting on the TLTRO decision, Deepak Aggarwal, Co-founder and Co-CEO, Moneyboxx Finance said the RBI continues to provide liquidity support through TLTRO, however, the liquidity benefits have not trickled down to small non-banking finance companies (NBFCs) which need targeted support. “Given that the central bank has limited options, direct fiscal support is the need of the hour even if it meant temporarily running high deficits,” he said.

Meanwhile, Sachin Chhabra, founder of B2B grocery e-commerce company Peel-Works, said RBI will be “well advised” to see what it can do to hold banks and NBFCs to account for lending. “Small traders continue to suffer poor operating environments as they choke in the absence of capital,” he said.