**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on August 16, 2018, announces the expansion of liquidity management tools available to Scheduled Cooperative Banks. Effective August 20, 2018, the Liquidity Adjustment Facility (LAF) is extended to Scheduled State Cooperative Banks (StCBs) that are CBS (Core Banking Solution) enabled and maintain a Capital to Risk-Weighted Assets Ratio (CRAR) of at least 9%. Furthermore, the Marginal Standing Facility (MSF) is also extended to both Scheduled Urban Cooperative Banks (UCBs) and Scheduled StCBs meeting the same CBS and CRAR (minimum 9%) criteria, providing an additional avenue for liquidity management. The terms and conditions for utilizing LAF and MSF will be governed by the instructions issued by the Financial Markets Operation Department (FMOD) of the RBI. The Department of Cooperative Bank Regulation (DCBR) will communicate lists of eligible (Positive List) and ineligible (Negative List) banks to the FMOD and the banks themselves. Eligibility will be continuously reviewed to ensure ongoing compliance with the CRAR requirement. For inquiries, contact the Department of Cooperative Bank Regulation, Central Office, C-7, 1st/2nd Floor, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051, Phone: 022-26578300/26578100, Fax: 022-26571117, Email: cgmdcbrcorbi.org.in. The circular is signed by Neeraj Nigam, Chief General Manager.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for monetary policy and regulation of the banking system.
Liquidity Adjustment Facility (LAF): A monetary policy tool used by the Reserve Bank of India to inject or absorb liquidity into/from the banking system.
Marginal Standing Facility (MSF): A facility under which scheduled commercial banks can borrow overnight funds from the Reserve Bank of India against their government securities holdings.
Scheduled Primary Urban Cooperative Banks (UCBs): Urban Cooperative Banks that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
Scheduled State Cooperative Banks (StCBs): State Cooperative Banks that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
Financial Markets Operation Department (FMOD): A department of the Reserve Bank of India responsible for implementing monetary policy and managing the government's debt.
Department of Co-operative Bank Regulation (DCBR): A department of the Reserve Bank of India responsible for the regulation and supervision of cooperative banks.
Mumbai, Maharashtra: A city in Maharashtra, India where the Central Office of Department of Cooperative Bank Regulation is located.
भारतीय �रज़व र् बक�
_______________________RESERVE BANK OF INDIA_______________________
www.rbi.org.in
RBI/2018-19/38
DCBR.BPD.(PCB/RCB).Cir.No.3/16.27.000/2018-19 August 16, 2018
The Chief Executive Officers of
All Scheduled Primary (Urban) Co-operative Banks/
All Scheduled State Co-operative Banks
Madam / Dear Sir,
Introduction of Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF)
for Scheduled Co-operative Banks
Please refer to our circular UBD.BPD.(SCB).Cir.No.1/16.27.000/2014-15 dated October 29,
2014 regarding Introduction of Liquidity Adjustment Facility (LAF) for Scheduled Primary
(Urban) Co-operative Banks (UCBs).
2. In this connection, it has been decided that with effect from August 20, 2018, LAF will also be
extended to Scheduled State Co-operative Banks (StCBs) which are CBS enabled and have
CRAR of at least 9 percent.
3. Further, in order to provide an additional window for liquidity management over and above
what is available under LAF, it has also been decided that with effect from August 20, 2018,
Marginal Standing Facility (MSF) will be extended to Scheduled UCBs and Scheduled StCBs
which are CBS enabled and have CRAR of at least 9 percent.
4. The terms and conditions for availing LAF and MSF would be as per the instructions issued
by Financial Markets Operation Department (FMOD) of the Reserve Bank of India from time to
time.
5. The names of such Scheduled Co-operative Banks which meet the eligibility norms to
participate in LAF and MSF (Positive List), and of those Scheduled Co-operative Banks found
ineligible (Negative List) will be communicated shortly to the FMOD by Department of Co-
operative Bank Regulation (DCBR) under intimation to the banks concerned.
सहकारी ब�क िविनयमन िवभाग, क��ीय कायार्लय, सी-7, पहली/ दसू री मंिज़ल, बां�ा कुला र्संकुल, बां�ा (पूवर्), मुंबई – 400 051
फोन: 022 – 26578300/ 26578100 ; फैक्स: 022 - 26571117 ; ई-मेल: cgmdcbrco@rbi.org.in
Department of Co-operative Bank Regulation, Central Office, C-7, 1st/ 2nd Floor, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051
Phone: 022 – 26578300/ 26578100; Fax: 022 - 26571117; E-mail: cgmdcbrco@rbi.org.in
�हदी आसान ह,ै इसका �योग बढ़ाइए—
चेतावनी: �रज़व र्बक� द्वारा ई-मेल, डाक, एसएमएस या फोन कॉल के ज�रए �कसी क� भी व य ् िक्तगत जानकार� जैसे बक� के खाते का ब य् ौरा, पासवड र्आ�द
नह�ं मांगी जाती है। यह धन रखने या देने का प्रस् ताव भी नह�ं करता है। ऐसे प्रस् ताव� का �कसी भी तर�के से जवाब मत द�िजए।
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords,etc. It never
keeps or offers funds to anyone. Please do not respond in any manner to such offers.6. The eligibility status of the banks in the Positive List will be reviewed on an ongoing basis to
ensure that the CRAR requirement is being complied with.
Yours faithfully,
(Neeraj Nigam)
Chief General Manager
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