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