Second LAF from Nov 28: RBI
The Reserve Bank of India (RBI) on Saturday said it would introduce a second round of Liquidity Adjustment Facility (SLAF) from Monday to fine-tune the management of liquidity in the system.
By PTI |
MUMBAI: The Reserve Bank of India (RBI) on Saturday said it would introduce a second round of Liquidity Adjustment Facility (SLAF) from Monday to fine-tune the management of liquidity in the system.
The decision to introduce SLAF, to be conducted on all working days except Saturdays, has been taken in response to suggestions from the market participants, RBI said.
Bids for SLAF will be received between 1500 hrs and 1545 hrs against the existing LAF, which is conducted in the forenoon between 9.30 and 10.30.
"The salient features of SLAF are the same as those of LAF. However, the settlement for the LAF and SLAF will be conducted separately and on gross basis," the Central Bank said in a statement here.
SLAF will be subject to review and modifications as needed, the statement added.
The Reserve Bank carries out daily reverse repurchase and repurchage auctions to add or reduce cash from the total national banking system.
The short-term liquidity position was reported to be tight.
The cash advances have fallen over the last few weeks because of heavy withdrawals by corporate houses.
Earlier, this month, RBI Deputy Governor had said in Kolkata at BANCON 2005 that as a corrective step, the central bank would introduce a second round of LAF shortly.
The decision to introduce SLAF, to be conducted on all working days except Saturdays, has been taken in response to suggestions from the market participants, RBI said.
Bids for SLAF will be received between 1500 hrs and 1545 hrs against the existing LAF, which is conducted in the forenoon between 9.30 and 10.30.
"The salient features of SLAF are the same as those of LAF. However, the settlement for the LAF and SLAF will be conducted separately and on gross basis," the Central Bank said in a statement here.
SLAF will be subject to review and modifications as needed, the statement added.
The Reserve Bank carries out daily reverse repurchase and repurchage auctions to add or reduce cash from the total national banking system.
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The short-term liquidity position was reported to be tight.
The cash advances have fallen over the last few weeks because of heavy withdrawals by corporate houses.
Earlier, this month, RBI Deputy Governor had said in Kolkata at BANCON 2005 that as a corrective step, the central bank would introduce a second round of LAF shortly.
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