RBI allows additional borrowing on March-end

Mumbai: The Reserve Bank today said it will provide additional borrowing facility to banks in the last two days of the fiscal to prevent any liquidity crisis in view of tax payments.

“With a view to providing flexibility to scheduled commercial banks in their liquidity management on March 30 and 31, 2012, the Reserve Bank of India has decided to conduct additional repo auction under Liquidity Adjustment Facility (LAF) on March 30, 2012 between 5 and 5.30 pm,” RBI said.[caption id=“attachment_257607” align=“alignleft” width=“380” caption=“Arranging additonal borrowing facilities. Reuters”]  [/caption]

The usual LAF Reverse Repo and Marginal Standing Facility (MSF) operations would also be conducted between 5 pm and 5.30 pm on 30 March 2012 as against the normal timing of 4.30 pm and 5.00 pm, it said.

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Repo rate at which banks borrow from the RBI is 8.5 percent while MSF rate is 9.5 percent.

Further, it said RBI would conduct additional 3-day LAF (both Repo and Reverse Repo) and MSF operations on 31 March 2012 (Saturday) between 2.30 pm to 3 pm.

It also clarified that the features of the additional LAF and MSF would remain the same as those of the daily LAF and MSF in all operational aspects.

PTI