FIDC said NBFCs
are conduits for reaching out last-mile credit to the aforementioned crucial sectors. They borrow only for on-lending and hence can act as a force-multiplier and expand the credit reach to various sectors. Allowing banks to permit NBFCs
to access these funds for the targeted lending to the desired segments would significantly facilitate meeting the objectives, the lobby group said.
The group suggested carving out a part of the On-Tap TLTRO funds for the NBFCs including small NBFCs to avail of loans from banks for on-lending to the desired sectors only. RBI
will conduct on tap TLTRO with tenors of up to three years for up to Rs one trillion. This on-Tap money will be available at a floating rate linked to the policy repo rate.
availed by banks under the scheme has to be deployed in corporate bonds, commercial paper, and non-convertible debentures issued by the entities in specific sectors. Liquidity
availed under the scheme can also be used to extend loans and advances to these sectors, the RBI said in guidelines issued for the scheme.
In order to entice banks to use this facility, the RBI has relaxed some rules for investment and loans granted from the on-tap TLTRO funds. Investments made by banks using on-tap TLTRO funds will be classified as held to maturity (HTM) even in excess of 25 per cent of the total investment allowed to be included in the HTM portfolio.
All exposures under this facility will also be exempt from reckoning under the large exposure framework (LEF). Further, banks that had availed of funds under TLTRO and TLTRO 2.0 earlier will get the option of reversing these transactions before maturity.