85 breached
The Indian rupee has breached the significant psychological barrier of 85 against the US dollar, marking an all-time low amid a confluence of domestic and global pressures.
The Reserve Bank has proposed to allow the NBFC sector to avail the benefit of its ‘TLTRO on Tap’ scheme.
The scheme provides liquidity support for revival of activity in specific sectors that have both backward and forward linkages and having multiplier effects on growth.
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“Given that NBFCs are well recognised conduits for reaching out last mile credit and act as a force multiplier in expanding credit to various sectors, it is now proposed to provide funds from banks under the ‘TLTRO on Tap’ scheme to NBFCs for incremental lending to these sectors,” the monetary policy statement said.
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The RBI had announced the scheme on October 9, 2020 which is available up to March 31, 2021.
In addition to the five sectors announced under the scheme on October 21, 2020, 26 stressed sectors identified by the Kamath Committee were also brought within the ambit of sectors eligible under tap TLTRO on December 4, 2020.
“Liquidity availed by banks under the scheme is to be deployed in corporate bonds, commercial paper, and non-convertible debentures issued by entities in these sectors.”
“The liquidity availed under the scheme can also be used to extend bank loans and advances to these sectors. Investments made by banks under this facility can be classified as held to maturity (HTM) even above the 25 per cent of the total investment permitted to be included in the HTM portfolio.”
The statement added that all exposures under this facility are exempted from reckoning under the large exposure framework (LEF).
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