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TLTRO 2.0: Reserve Bank gets lukewarm response from banks

TLTRO 2.0: Reserve Bank gets lukewarm response from banks

(RBI) got lukewarm response from banks for availing three-year liquidity at the maiden auction on Thursday under the Targeted Long-Term Repo Operations (TLTRO) 2.0. The auction proceeds are specifically meant for deployment in the debt papers of small- and mid-size non-banking finance companies (NBFCs) and microfinance institutions (MFIs).

As against the notified amount of Rs. 25,000 crore, the RBI received 14 bids aggregating Rs. 12,850 crore. Given the tepid response from banks, the central bank said it will review the auction results and take a view in the matter.

Vydianathan Ramaswamy, Director, Ratings, Brickwork Ratings, observed that the limited participation by banks in TLTRO 2.0 clearly highlights their reluctance to lend to small- and mid-size NBFCs and MFIs in the current situation.

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