Press Releases

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Date : May 26, 2010
RBI Announces Liquidity Easing Measures

The Monetary Policy Statement for 2010-11 had indicated that the Reserve Bank intends to actively manage liquidity to ensure that the growth in demand for credit by both the private and public sectors is satisfied in a non-disruptive way. Accordingly, the Reserve Bank has been closely monitoring the developments in the global and domestic financial markets.

2.   The latest assessment of liquidity conditions suggests that there could be temporary liquidity pressures in the market largely due to changes in government balances on account of advance tax payments and 3G auctions. In order to address the temporary liquidity pressures, the following measures are being taken:

  1. Scheduled commercial banks may avail of additional liquidity support under the LAF to the extent of up to 0.5 per cent of their net demand and time liabilities (NDTL). For any shortfall in maintenance of SLR arising out of availment of this facility, banks may seek waiver of penal interest purely as an ad hoc, temporary measure. This facility will be available till July 2, 2010.

  2. The second LAF (SLAF) will be conducted on a daily basis up to July 2, 2010. The SLAF will be conducted between 4.00 p.m. and 4.30 p.m.

3.   These measures are ad hoc in nature and the additional liquidity support under this scheme and the daily SLAF will be available with effect from May 28, 2010 and up to July 2, 2010.

G. Raghuraj
Deputy General Manager

Press Release : 2009-2010/1600

Related Notification

May 28, 2010

Second Liquidity Adjustment Facility