The Reserve Bank will provide term funding to banks at a very low interest rate under the previously announced Term Lending Facility (TLF), to help them support the Government’s Business Finance Guarantee Scheme and promote lending to businesses.
The Reserve Bank today outlined the operational details of the TLF, which will be available to banks from 26 May.
Under the facility, the Reserve Bank will offer to lend funds to banks at the Official Cash Rate of 0.25 percent, fixed for three years.
“The Reserve Bank has designed the TLF to give the Government’s Business Finance Guarantee Scheme (BFGS) the best chance of success,” Assistant Governor Christian Hawkesby says.
“We expect these low cost of funds to be passed through to low lending rates for business customers.”
Access to the funds will be linked to each banks’ lending under the BFGS and the facility will require approved eligible collateral to be pledged against the funds.
The facility will be available to use for six months, starting from 26 May and ending on 29 October. The schedule below shows the TLF programme.
Offering 10:00am – 12:00pm and 1:00pm – 3:00pm
- 26 May 2020 – 28 May 2020
- 25 June 2020 – 29 June 2020
- 24 July 2020 – 28 July 2020
- 26 August 2020 – 28 August 2020
- 24 September 2020 – 28 September 2020
- 27 October 2020 – 29 October 2020