The Reserve Bank on Friday said it will conduct the first auction for special long-term repo operations (SLTRO) of Rs 10,000 crore for Small Finance Banks (SFBs) on May 17.
To provide further support to small business units, micro, and small industries, and other unorganised sector entities adversely affected during the current wave of the pandemic, the RBI has decided to conduct SLTRO of Rs 10,000 crore at the repo rate for the SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower.
The facility will be available till October 31, 2021. In a statement, the Reserve Bank of India said it will conduct one auction for SLTRO each month.
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"The first auction will be conducted on May 17, 2021, for Rs 10,000 crore. The unutilised portion of notified Rs 10,000 crore will be carried forward in each subsequent auction until fully utilised or till the last auction, whichever is earlier," it said.
The SFBs participating in the scheme will have to ensure that the amount borrowed from the RBI should at all times be backed by lending to the specified segments till the maturity of the SLTRO. Further, SFBs should endeavour to lend within 30 days from the date of availing the funds from the RBI.
In case of over-subscription of the notified amount, the allotment will be done on a pro-rata basis, the central bank said. The minimum bid amount would be one crore rupees and multiples thereof.
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