The central bank has created a separate liquidity window of Rs 15,000 crore and offers incentives for banks lending to the “contact-incentive sectors”.
Travel agents, private bus operators, rent-a-car service providers, spa clinics, and beauty parlours can borrow funds under this facility for three year at repo rate.
RBI on Friday kept the repo rate unchanged at 4% a year.
Banks, on the other hand, can park their surplus liquidity up to the size of the loan book created under this scheme with the RBI and earn 40 basis points higher than what they normally do through the reverse repo window.
“We are always ready to lend. We are eagerly looking to deploy our surplus funds. But the trigger has to come from the demand side,” a senior bank executive said, reacting to the policy announcement.
This on-tap liquidity window will remain open till March 31, 2022, RBI Governor Shaktikanta Das said.
The central bank announced a fresh liquidity support of Rs 16,000 crore for Small Industries Development Bank of India for on-lending or providing refinance to micro, small and medium enterprises (MSMEs), particularly smaller MSMEs and other businesses including those in credit deficient and aspirational districts.
This is over and above the Rs 15000 crore funding support to Sidbi announced in the April policy.
This fresh facility will be available at the prevailing policy repo rate for a period of up to one year.