The Reserve Bank of India (RBI) on Monday received bids worth Rs 1.23 trillion for Rs 25,000 crore on offer for its one-year long-term repo operations (LTRO).

In the auction for three-year maturity liquidity operations made last week, the RBI had received bids worth Rs 1.94 trillion for Rs 25,000 crore on offer. On Monday’s auction, the RBI received 52 bids, which the RBI allotted on a pro-rata basis.

The idea behind the LTRO, and also relaxations on cash reserve ratio (CRR) for incremental lending to the retail and micro, small and medium enterprises, announced as a policy measure on the same day, is to bring down the cost of funds for banks without necessarily lowering the deposit rate. The banks can then lower the lending rate, and extend credit at a cheaper rate. The central bank plans to go for Rs 1 trillion worth of LTRO for now.