Lloyds Banking Group had announced that by next week, it would be paying the remaining Eur3.5 billion or US$4.6 billion amount it accepted under the European Central Bank's long term funding plan.

Previously, Lloyds had accepted Eur13.5 billion from the three year long term refinancing operations fund from the ECB. It had already repaid Eur10 billion last February and it would be repaying the outstanding amount after the sale of its Spanish bank retailing business.

Back in 2011, ECB lent out Eur1 trillion to financial institutions in two separate tranches. The move was done to help avoid a credit crunch. Nearly Eur270 billion of the total amount has been paid back as the banks improved their liquidity through normal operations.

The longer term refinancing operation or LTRO has been lauded as the defining policy formulated by Mario Draghi, current ECB president. This is the way that helped stabilize eurozone markets through funding loans with an interest pegged at just 1%. The banks are allowed to pay back the amount after the first year of its release.