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Fund-rich banks unlikely to use RBI's special window of Rs 15,000 crore

The RBI has decided to set up a special liquidity window of Rs 15,000 crore for contact-intensive sectors

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Illustration by Binay Sinha

Subrata PandaAbhijit Lele Mumbai,
Lenders flush with funds are less likely to use the Reserve Bank of India’s (RBI’s) special window of Rs 15,000 crore for contact-intensive sectors such as tourism and hospitality to ensure continued flow of liquidity to those hit by the second wave of Covid-19.
 
Lenders will now have their task cut out and need to ensure that large and better-rated entities do not corner all benefits. “They must see to it that those who are weak to withstand shocks get support. A repeat of the experience with the early version of targeted long-term repo operations (TLTRO) must be avoided,”