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Section 24 of the Banking Regulation Act, 1949 – Shortfall in Maintenance of Statutory Liquidity Ratio (SLR) – Additional Liquidity support under Liquidity Adjustment Facility (LAF)


 Notice Date : 26 May 2010

Section 24 of the Banking Regulation Act, 1949 – Shortfall in Maintenance of Statutory Liquidity Ratio (SLR) – Additional Liquidity support under Liquidity Adjustment Facility (LAF)

RBI/2009-10/477
Ref. DBOD.No.Ret.BC.103/12.02.001/2009-10

May 26, 2010

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)

At present, banks obtain liquidity from the Reserve Bank under the liquidity adjustment facility (LAF) against the collateral of eligible securities that are in excess of their prescribed statutory liquidity ratio (SLR). It has been decided that, in addition, purely as a temporary measure, scheduled commercial banks may avail additional liquidity support under the LAF to the extent of up to 0.5 per cent of their net demand and time liabilities. The additional liquidity support will be available with effect from the LAF auctions of May 28, 2010 and up to July 2, 2010.

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.

Yours faithfully

(B. Mahapatra)
Chief General Manager-in-Charge

 

 

Guest
on 27 May 2010
Notification No : Ref. DBOD.No.Ret.BC.103/12.02.001/2009-10
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