The Reserve Bank of India will allow banks to extend credit to non-banking finance companies under the targeted long-term repo operations scheme. RBI Governor Shaktikanta Das announced this and other liquidity and regulatory measures on Friday along with the monetary policy committee’s decision to hold key policy rates and maintain an accommodative stance. The TLRO scheme announced in March last year was aimed at providing funds to specific sectors and was expanded to five more sectors in October. On December, 26 stressed sectors identified by the KV Kamath committee were included. The previous iterations of the TLTRO scheme used banks as intermediaries to supply liquidity to various sectors, including stressed NBFCs and microfinance institutions. Now, the inclusion of NBFCs as intermediaries to provide funds to specific sectors will aid in wider distribution. “Given that NBFCs are well-recognized conduits for reaching out last-mile credit and act as a force multiplier in expanding credit to various sectors, it is now proposed to provide funds from banks under the TLTRO on-tap scheme to NBFCs for incremental lending to these sectors,” the RBI said in its statement for developmental and regulatory policies.