RBI to conduct third tranche of Rs 25,000 crore TLTRO on April 7

Mumbai: The Reserve Bank of India (RBI) on Friday said it will conduct the third tranche of Rs 25,000 target long term repo operations (LTROs) on April 7 for a 3-year tenor.

Last month, the central bank provided the much-needed shot in the arm to the non-SLR market in terms of liquidity support.

The central bank said it will conduct auctions of targeted term repos of up to three-year tenor of appropriate sizes for a total amount totalling Rs 1 lakh crore at a floating rate linked to the policy repo rate.

Liquidity availed under the scheme by banks has to be deployed in investment-grade corporate bonds, commercial papers and non-convertible debentures over and above the outstanding level of their investments in these bonds as on March 27, RBI said.

Market participants gave thumbs up to the central bank’s TLTROs, and said this will help in reducing the yield on corporate bonds, which have been reeling under pressure amid low volumes.