The Reserve Bank of (RBI) will be conducting one special long term repo operation (SLTRO) for small finance banks (SFB) for each month, totalling Rs 10,000 crore.

The first auction of Rs 10,000 crore will take place on May 17, and the unutilised portion will be auctioned on June 15. Like this, the SLTROs will continue till October 14, or till the unutilised amount is fully utilised.

The SLTRO will be valid for three years. All SFBs will be eligible to participate in the scheme, which was announced by RBI Governor Shaktikanta Das on May 5 to mitigate Covid related dislocations.

However, the SFBs will have to ensure that the amount borrowed from the RBI should at all times be let to the specified segments, namely small business units and other unorganised sectors impacted by the pandemic.

The fresh lending can be done for loans of up to Rs 10 lakh. There will be no tenor restriction regarding lending by SFBs under the scheme.

 “Furthermore, SFBs should endeavour to lend within a reasonable period, i.e., not later than 30 days from the date of availing the funds from RBI,” the central bank said in a statement.