RBI/2008-09/229
Ref.
DBOD.No.Ret.BC. 62 / 12.02.001/2008-09 October 15, 2008 All
Scheduled Commercial Banks Dear Sir, Section
24 of the Banking Regulation Act, 1949 –
Shortfall in Maintenance of Statutory
Liquidity Ratio (SLR) –
Additional Liquidity Support under Liquidity Adjustment
Facility (LAF) Please refer to our circular DBOD.
No. Ret. BC. 43/12.02.001/2008-09 dated September 16, 2008 on the captioned
subject. It has been decided, purely as a temporary measure, that banks may avail
of additional liquidity support exclusively for the purpose of meeting the liquidity
requirements of mutual funds to the extent of up to 0.5 per cent of their net
demand and time liabilities (NDTL).This additional liquidity support will terminate
14 days from the closure of the special term repo facility for mutual funds announced
on October 14, 2008 vide our circular
FMD.MOAG.No.26/01.01.01/2008-09. This accommodation will be in addition to
the temporary measure contained in the above-mentioned circular permitting banks
to avail of additional liquidity support to the extent of up to 1 per cent of
their NDTL. It is advised that for any shortfall in maintenance
of SLR arising out of availment of this additional liquidity support under LAF,
bank may apply to the Reserve Bank in writing under sub-section (8) of Section
24 of the Banking Regulation Act, 1949 with a request not to demand payment of
the penal interest thereon. This measure is ad hoc, temporary
in nature and will be reviewed on a continuous basis in the light of the evolving
liquidity conditions. Yours faithfully, (P.
Vijaya Bhaskar)
Chief General Manager |
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