Home / Finance / News / Just 2.1% of TLTRO funds went to NBFCs that needed them most: RBI report

Just 2.1% of TLTRO funds went to NBFCs that needed them most: RBI report

Whole idea of launching TLTRO funds was to provide system level and targeted liquidity to sectors with liquidity constraints--something banks clearly did not do, shows Trend and Progress Report

Though the RBI has offered restructuring and the sentiment is better than what it was a few months ago

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The RBI extended Rs 1.12 trillion through TLTROs for banks to lend to NBFCs and small and medium enterprises

3 min read Last Updated : Dec 31 2020 | 1:09 AM IST

Banks deployed more than 70 per cent money raised through targeted long-term repo (TLTRO) in papers issued by AAA-rated non-banking finance companies (NBFC), defeating the very purpose of the special liquidity operations.

The top-rated NBFCs did not need special assistance from the RBI or banks. They had enough access to the debt markets and had a comfortable liquidity position. The whole idea of launching the TLTRO funds, in various batches, was to provide system level liquidity as well as “targeted liquidity to sectors and entities experiencing liquidity constraints and restricted market access.”

Clearly, banks did not do it, data released

Topics : Banks NBFCs RBI

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