RBI Announces Second Tranche Of Long-term Repo Operation On April 3

Money & Banking

PTI Mumbai | Updated on March 30, 2020 Published on March 30, 2020

The Reserve Bank on Monday announced the second tranche of targeted long term repo operation (TLTRO) of ₹25,000 crore for a three-year tenor.

The TLTRO as an instrument was introduced last Friday along with the policy rate cut of 0.75 per cent in order to encourage financial institutions to lend more. A slew of incentives were also announced to encourage the same.

The second TLTRO will be conducted for the notified amount on April 3 for an hour starting 11 AM, the apex bank said.

The total size of the TLTRO has been fixed at ₹1 lakh crore and the RBI had announced the first TLTRO immediately on Friday.

The banks have to deploy the money in well-rated corporate bonds and have been incentivised by making it possible to recognise such investments in the held to maturity rather than mark to market, which makes a bank’s earnings exposed to market volatilities.

Published on March 30, 2020

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