RBI announces 2nd tranche of long-term repo operation on Apr 3

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RBI announces 2nd tranche of long-term repo operation on Apr 3
Mumbai, Mar 30 () The Reserve Bank on Monday announced the second tranche of targeted long term repo operation (TLTRO) of Rs 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.

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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 Rs 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. AA MRMR
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