Mumbai, Aug 6 (IANS): The Reserve Bank on Friday decided to extend the 'TLTRO on Tap' liquidity scheme till December 31, 2021.

The scheme provides liquidity support for revival of activity in specific sectors that have both backward and forward linkages and also have multiplier effects on growth. It was announced by RBI on October 9, 2020 and the operating period of the scheme was extended in phases till September 30, 2021.

With a view to increasing the focus of liquidity measures on revival of activity in specific sectors that have both backward and forward linkages and having multiplier effects on growth, the RBI had announced the On Tap TLTRO scheme initially for five sectors which was available up to March 31, 2021.

Stressed sectors identified by the Kamath Committee were also brought within the ambit of the scheme on December 4, 2020 and subsequently bank lending to NBFCs on February 5, 2021. On April 7, the scheme was extended by a period of six months, i.e., till September 30, 2021.

"Given the nascent and fragile economic recovery, it has now been decided to extend the On Tap TLTRO scheme further by a period of three months, i.e., till December 31, 2021," RBI's statement on developmental and regulatory policies said.