1. Long-Term Repo Operations (LTROs) are for more than 28 days. 2. On 06-Feb-2020, in the 'Statement on Developmental and Regulatory Policies', RBI [announced](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=49343#:~:text=2.%20Long%20Term%20Repo%20Operations%20(LTROs)%20for%20Improving%20Monetary%20Transmission) about the 'Long Term Repo Operations'. 3. These were fixed-rate [repos](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49360) (conducted at fixed rate with the rate being fixed for the tenor of the operation) for tenors for 1 and 3-year, for up to a total amount of ₹ 1,00,000 crore against government securities of same or high tenor as [collateral](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49397). 4. Frequently Asked Questions [(FAQs) on LTROs](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49397) 5. It was conducted in [5 tranches](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=50313#:~:text=Sr.%20No.-,Date%20of%20LTRO,-Date%20of%20Repayment) - 17 and 24th February, 02, 09 and 18th March. 6. Term repos, especially long-term repos, help to improve the transmission of policy impulses (policy signals or rate changes) across the interest rate spectrum. 7. The variable rate term repos have evolved as a useful indicator of underlying liquidity conditions. Term repos allows market participants to hold liquidity for a longer period, thereby providing the impetus for engaging in term transactions in the market, evolving market-based benchmarks for pricing various financial products. 8. They also improve the efficiency in cash/ treasury management. 9. ==This, in turn, has also helps to move away from sector-specific refinance (where there is preferential access to a particular sector or entity) towards a more generalised provision of system liquidity.== # Targeted Long-Term Repo Operations (TLTRO 1.0 & TLTRO 2.0) 1. After LTRO, TLTRO 1.0 was [announced](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=49582) on 27-March-2020, for Rs 1 lakh crore, with a tenor of 3 years at [floating rate](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49583#:~:text=The%20interest%20rate%20on%20TLTROs) linked to the policy repo rate (the rate was fixed at the time of allotment, but adjusted over the tenor with changes in the policy rate) but for specific instruments and sectors. 1. Banks could buy only investment grade corporate bonds, commercial paper, and non-convertible debentures with these funds. 2. The aim was to help cool down the risk/liquidity premia on these assets after the onset and rapid propagation of COVID-19 in India ignited large sell-offs in the domestic equity, bond and forex markets. 3. It was conducted in four tranches: [27-March](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49583), [3](https://www.rbi.org.in/commonman/English/scripts/PressReleases.aspx?Id=3197), [9](https://www.rbi.org.in/commonman/English/Scripts/PressReleases.aspx?Id=3200) and [17th April, 2020](https://www.rbi.org.in/commonperson/English/Scripts/PressReleases.aspx?Id=3203). 2. After TLTRO 1.0, TLTRO 2.0 was [announced](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49689) on April-17-2020, for Rs 50,000 crores, for a tenor of 3 years. 1. It was aimed to channel liquidity through banks to small and mid-sized corporates, including non-banking financial companies (NBFCs) and micro finance institutions (MFIs) through above instruments. 2. On [23-April-2020](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=49689), the first auction under TLTRO 2.0 for Rs 25,000 for 3-year tenor was conducted. There were no further auctions due to tepid response by banks to lend to NBFCs and MFIs. 3. [FAQs](https://rbi.org.in/scripts/FAQView.aspx?Id=134) on TLTRO 1.0 & TLTRO 2.0 # On Tap Targeted Long Term Repo Operations (On Tap TLTRO) 1. After TLTRO 2.0, On [Oct-9, 2020](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50480#:~:text=1.-,On%20Tap%20TLTRO,-The%20focus%20of), RBI announced an on-tap LTRO, with a tenors of 3 years, for a total amount of up to ₹1,00,000 crore at a floating rate linked to the policy repo rate, to be deployed in these 5 [sectors](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50547). 2. On Dec-11, 2020, it was [extended](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50790) to include more 26 sectors. 3. On Feb-5-2021, it was [extended](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51083) to include NBFCs. 4. It was available only up to March 31, 2021. But on April-7-2021, it was extended till [30-September-2021](https://www.rbi.org.in/commonman/English/Scripts/PressReleases.aspx?Id=3290#:~:text=As%20announced%20in%20the%20Statement,liquidity%20measures%20on%20revival%20of), and on Aug-13-2021, the deadline was extended for 3 months, i.e. up to 31-December-2021. The transactions under LTRO/TLTRO/ TLTRO 2.0 are not present in the outstanding operations in the MMO, as on Nov-2024, as they have been repaid by the borrowing banks. These long-term repos not only provided liquidity to the economy but also helped banks to improve their earnings and recoup losses from pandemic-related loan defaults. # Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs) 1. On 7-May-21, RBI announced special [three-year long-term repo]( https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51546) operations (SLTRO) of ₹10,000 crore at repo rate for the small finance banks (SFBs). 2. The eligible collateral for SLTROs was same as those applicable for LAF. They are not provided at fixed rates. As these are possible substitutes for OMOs, these instruments are operated at market determined rates. [^1] As they purely for liquidity management rather than for signaling the policy rate/monetary stance, longer tenor auctions for repos are held at variable prices. [^2] [^1]: RBI. (2019, September 26). *[Report](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=48247) of the Internal Working Group to Review the Liquidity Management Framework-2019* [^2]: RBI. (2011). *[Report](https://rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=631) of the Working group on Operating Procedure of Monetary Policy. Chairman: Deepak Mohanty*