RBI Extends On-tap Liquidity Facility for Small Banks Till 31st December

Reserve Bank of India

The Reserve Bank of India (RBI) has extended the Rs 10,000 crore on tap liquidity facility for further three months from 31st October 31 till 31st December 31, 2021, in order to facilitate small finance banks.

As per the statement released by RBI, “Small finance banks have been playing a prominent role in providing last mile credit to individuals and small businesses. Recognising the persisting uneven impact of the pandemic on small business units, micro and small industries, and other unorganised sector entities, it has been decided to extend this facility till 31st December, 2021.

Further, this will now be available on tap to ensure extended support to these entities. The three-year SLTRO facility of Rs 10,000 crore is being drawn at the repo rate, which is kept unchanged at 4 percent. This facility is expected to be deployed for fresh lending of up to Rs 10 lakh per borrower, statement added.

On May, RBI had announced Term Liquidity Facility of Rs 50,000 crore with tenure of up to 3 years, at repo rate. Banks can give fresh lending support to variety of stakeholders under this facility. Bank will be provided incentives to provide credit under this facility.


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