The Reserve Bank of India on 4th June 2021 has decided to open a separate liquidity window of ₹15,000 crore with tenors of up to three years at the repo rate till March 31, 2022 for certain contact-intensive sectors i.e., hotels and restaurants; tourism – travel agents, tour operators and adventure/heritage facilities; aviation ancillary services – ground handling and supply chain; and other services that include private bus operators, car repair services, rent-a-car service providers, event/conference organisers, spa clinics, and beauty parlours/saloons.
Under the scheme, banks are expected to create a separate COVID loan book and it shall remain operational from June 07, 2021 till March 31, 2022.
All banks eligible under the Liquidity Adjustment Facility (LAF) can participate in the scheme. If a bank places multiple requests during the week, all such requests will be aggregated, and a single repo contract will be created on the date of operation. The Reserve Bank reserves the right to decide the quantum of allotment and /or accept/reject any or all of the requests, either wholly/partially, without assigning any reason thereof.
Further the Banks can park their surplus liquidity up to the size of the COVID loan book, created under this scheme, in a special 14-day reverse repo window to be conducted on each reporting Friday between 12:30 PM and 1:00 PM. The first such operation will be held on June 18, 2021. These 14-day reverse repo operations would continue till March 31, 2022, and will be reviewed thereafter. Banks are required to ensure scrupulous compliance with the above conditions prior to the parking of funds in the special 14-day reverse repo window.
