With reference to  “Targeted Long-term Repo Operations (TLTRO)” consider following statements

1. It is a tool that lets banks borrow funds from the RBI.
2. That funds do not need any collateral.
3. The funds can be invested in investment grade corporate bonds, commercial paper and debentures.

Select the correct statement.

• TLTRO is a tool that lets banks borrow one to three-year funds from the RBI at the repo rate. Hence, statement 1st is correct.
• Government securities with similar or higher tenure are provided as collateral for borrowing funds. Hence, statement 2nd is incorrect.
• The banks could access the funding and use it to invest in investment grade corporate bonds, commercial paper and debentures. Hence, statement 3rd is correct.

By: Shubham Tiwari