What changed
Previously, LAF Reverse Repo auctions were held alongside Repo auctions from 9:30-10:30 AM, and MSF was available from 3:30-4:30 PM. The new schedule shifts Reverse Repo and MSF to a single evening window from 4:30-5:00 PM, effective August 16, 2011. LAF Repo auctions continue unchanged in the morning slot.
What it means for you
Banks now have a consolidated evening window for parking excess liquidity (Reverse Repo) and accessing emergency funds (MSF), which may improve end-of-day cash management. The separation of Repo and Reverse Repo timings could reduce intraday confusion and align liquidity operations with market close. No changes to other terms or conditions of LAF and MSF schemes.
What you must do
- Update internal treasury systems and cut-off times for LAF Reverse Repo and MSF bids to 4:30-5:00 PM from August 16, 2011.
- Communicate the new timing to dealing rooms and back-office teams handling liquidity operations.
- Ensure morning LAF Repo auction processes remain unchanged at 9:30-10:30 AM.
- Review end-of-day liquidity forecasting to leverage the consolidated evening window.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Primary Dealers, Treasury and liquidity management teams
Why did RBI shift Reverse Repo and MSF to the evening?
The circular does not specify reasons, but the change likely aims to streamline end-of-day liquidity management and reduce overlap with morning Repo auctions.
Are there any changes to the terms of LAF or MSF schemes?
No. All other terms and conditions of the current LAF and MSF schemes remain unchanged as per the notification.
Does this affect Saturdays or non-Mumbai working days?
The new timing applies only on all working days in Mumbai, excluding Saturdays, consistent with the previous schedule.