Mumbai, April 30: The Reserve Bank of India on Thursday announced a special liquidity facility for mutual funds (SLF-MF) to ease liquidity strains on banks amid COVID-19 crisis. RBI said that it will be extended to all banks, irrespective of whether they avail funding from the RBI or deploy their own resources under the scheme. Also, RBI extended the window timings of Fixed Rate Reverse Repo and Marginal Standing Facility (MSF) operations.

Issuing the circular on Thursday, RBI said, "Based on requests received from banks, it has now been decided that the regulatory benefits announced under the SLF-MF scheme will be extended to all banks, irrespective of whether they avail funding from the Reserve Bank or deploy their own resources under the above-mentioned scheme." RBI Governor Shaktikanta Das Says Banks Can Decide on Offering 3-Month Moratorium to NBFCs.

It added, "Banks meeting the liquidity requirements of MFs by (1) extending loans, and (2) undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial paper (CPs), debentures and certificates of deposit (CDs) held by MFs will be eligible to claim all the regulatory benefits available under SLF-MF scheme without the need to avail back to back funding from the Reserve Bank under the SLF-MF."

Here's the tweet by RBI:

The RBI stated that bank claiming the regulatory benefits, as mentioned above, would be required to submit a weekly statement containing consolidated information on entity-wise and instrument-wise loans. These loans and advances extended or investment made are eligible for entities to Financial Markets Operations Department (email) and to Department of Supervision -- vial email -- on every Monday.

Earlier on April 27, RBI had announced a special liquidity facility for mutual funds (SLF-MF) to ease liquidity strains on Mutual Funds (MFs). These strains erupted in the wake of redemption pressures related to closure of some debt MFs. RBI also extended the window timings of Fixed Rate Reverse Repo and MSF operations.

(The above story first appeared on LatestLY on Apr 30, 2020 02:05 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).