Banks fear HTM hit, investment limits with repayment under TLTRO

The central bank had originally announced the on-tap TLTRO aggregating Rs 1 trillion in the monetary policy on October 9.

Banks are reluctant to return money taken under the targeted long-term repo operations (TLTRO), even as they can do that to raise cheaper funds from the Reserve Bank of India (RBI). 
 
The prime contention is that if banks return the money, they will have to remove that from the held-to-maturity (HTM) basket. So far as bonds are in the HTM category, there is no need to mark them to market.
 
Banks don't want to let that go since this money has been used to buy high yielding papers of non-banking financial companies (NBFCs). At the initial stages, the