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Targeted Long Term Repo Operations (TLTROs)

UPDATED: May 28, 2021

Q1: Will banks be required to maintain specified securities for the amount received in TLTRO in HTM book at all times? +

Ans: Yes. The banks will have to maintain amount of specified securities for the amount received in TLTRO in its HTM book at all times till maturity of TLTRO.

Q8: Can a bank sell a specified security acquired earlier under TLTRO through buy-back route and replenish the same with fresh acquisition of another specified security?

Ans: Banks can replace the security sold through buy-back route with any other specified security for the amount availed under TLTRO scheme. Banks should ensure that their TLTRO funding should always be backed by specified security till maturity of TLTRO.

Q9: Whether sale from HTM on account of buy-back by the issuers in respect of specified securities acquired under TLTRO scheme will be reckoned for computation of the regulatory limit applicable for disclosure?

Ans: Sale from HTM on account of buy-back by the issuers pertaining to specified securities acquired under TLTRO scheme is exempt from the disclosure threshold stipulated in para 2 of RBI Master Circular DBR.No.BP.BC.6/21.04.141/2015-16 dated July 1, 2015.

FAQs pertaining to TLTRO 2.0

Q14: Para 1 of the press release dated April 17, 2020 on TLTRO 2.0 states that the objective of TLTRO 2.0 is to channel liquidity to small and mid-sized corporates, including NBFCs and MFIs. However, in para 2 it has been stated that the funds availed under TLTRO 2.0 will have to be deployed in investment grade bonds, commercial paper (CPs) and non-convertible debentures (NCDs) of Non-Banking Financial Companies (NBFCs) and MFIs. Is the current tranche of TLTRO 2.0 is targeted only for NBFCs and MFIs?

Ans: The funds availed under TLTRO 2.0 are to be deployed in investment grade bonds, commercial paper (CPs) and non-convertible debentures (NCDs) of Non-Banking Financial Companies (NBFCs) and MFIs in the manner outlined in the press release dated April 17, 2020.

FAQs pertaining to On Tap TLTRO/ reversal of TLTRO/ TLTRO 2.0 transactions

Q17: Whether there is any restriction, with respect to Primary/Secondary market investments for funds availed under on Tap TLTRO scheme, should a bank desire to opt for acquiring specified securities issued by entities in specified sectors?

Ans: There is no restriction with respect to primary/ secondary market investments in specified securities under the on Tap TLTRO scheme.