“The Monetary Policy Committee’s sustained accommodative stance is positive from the perspective that RBI is giving utmost priority to growth. Today’s announcements by RBI to provide funds from banks under the TLTRO on tap scheme to NBFCs is a step that would ease liquidity challenges of small and mid-sized NBFCs and incentivize bank credit flows for them. Allowing banks to permit NBFCs to access these funds for the targeted lending to the desired segments such as the agriculture value chain and MSME would significantly facilitate meeting the objective of inclusive growth. These NBFCs borrow only for on-lending and hence can act as a force-multiplier and expand the credit reach to various sectors. The relief would improve cash flow and prevent further downslide from hereon. It indicates the willingness of the policymakers to ensure liquidity in the system.”
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