What changed
RBI decided to conduct the Second Liquidity Adjustment Facility (SLAF) on a daily basis at 4:15 PM up to January 28, 2011, extending the earlier arrangement from November 9, 2010. All other terms and conditions of the existing LAF scheme remain unchanged.
What it means for you
Banks and primary dealers get an additional daily liquidity window in the afternoon, providing more flexibility to manage short-term cash mismatches. This measure signals RBI's intent to keep systemic liquidity comfortable during the period. No changes to interest rates or collateral norms under LAF.
What you must do
- Update your treasury systems to include the daily 4:15 PM SLAF auction window until January 28, 2011.
- Ensure your dealing room is staffed to participate in the additional afternoon auction.
- Monitor liquidity positions more frequently to optimally use both LAF and SLAF windows.
- Acknowledge receipt of this circular as required by RBI.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Primary Dealers
What is the timing of the SLAF auction?
The SLAF auction will be conducted daily at 4:15 PM up to January 28, 2011.
Are there any changes to LAF terms and conditions?
No, all other terms and conditions of the current LAF scheme remain unchanged.
Who is eligible to participate in this SLAF?
All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers are eligible.