Lok Sabha Question No. 82 (STARRED), answered on 2021-07-26
Subject: Liquidity Support to Small Banks
Ministry: FINANCE
Asked by: Midhun Reddy, Goddeti Madhavi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## STARRED QUESTION NO. *82

TO BE ANSWERED ON THE 26 TH  JULY 2021/ SRAVANA 4, 1943 (SAKA) Liquidity Support to Small Banks

*82.

SHRI P.V. MIDHUN REDDY:

SHRIMATI GODDETI MADHAVI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the RBI has recently approved liquidity support of Rs.10,000 crore to small finance  banks  to  provide  further  support  to  small  business  units,  micro  and  small industries, and other unorganised sector entities which have been seriously affected during the current wave of the COVID-19 pandemic;
- (b) if so, the details thereof;
- (c) the time by which this scheme is likely to be implemented;
- (d) whether  the  RBI  has  announced  a  new  framework  for  restructuring  of  loans  to individuals and small businesses, including Micro, Small and Medium  Enterprises (MSMEs); and
- (e) whether  the  RBI  has  mandated  that  the  eligibility  criteria  to  avail  this  framework include that the borrower's aggregate exposure should not be more than Rs.25 crore as on March 31, 2021 and if so, the details thereof

## ANSWER

The Finance Minister (SMT. NIRMALA SITHARAMAN)

- (a) to (e): A statement is laid on the Table of the House.

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## Statement  for  Lok  Sabha  Starred  Question  no.  *82  for  26 th   July  2021,  regarding 'Liquidity  Support  to  Small  Banks'  by  SHRI  P.V.  MIDHUN  REDDY  and SHRIMATI GODDETI MADHAVI, Members of Parliament

(a) to (e):  As per input received from Reserve Bank of India (RBI), RBI has announced Special three-year Long-Term Repo Operations (SLTRO) of Rs. 10,000 crore at repo rate for the Small Finance Banks (SFBs), to be deployed for fresh lending of up to Rs. 10 lakh per  borrower  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.  This  facility  has  been  made  operational vide RBI  press  release  dated 7.5.2021  and  will  be  available  till  31.10.2021.  The  first  auction  under  the  SLTRO  was conducted  on  17.5.2021.  The  unutilised  portion  of  notified  Rs.  10,000  crore  is  being carried forward in each subsequent auction, until fully utilised or till the last auction to be conducted in October 2021, whichever is earlier. Three auctions under this scheme have been conducted so far, and SFBs have availed a total amount of Rs. 1,640 crore under the scheme.

With regard to new framework for resolution/restructuring of loans,  RBI, vide its  circulars dated 5.5.2021 on Resolution Framework 2.0 for COVID-19-related stress, has permitted lending  institutions  to  implement  resolution  plans  /  restructuring  in  respect  of  eligible personal loans, and loans to individuals for business purposes, loans to small businesses and micro,  small  and  medium  enterprises  (MSME),  while  classifying  them  as  standard.  Such resolution  plan  /restructuring  has  been  permitted  in  respect  of  loans  to  individuals  for business purposes, loans to small businesses and loans to MSMEs having aggregate exposure of up to Rs. 25 crore as on 31.3.2021, which has been enhanced to Rs. 50 crore vide RBI's circulars dated 4.6.2021.

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