**Summary:**
RBI policy reference number RBI201516355, dated April 5, 2016, announces a revision to the Standing Liquidity Facility (SLF) for Primary Dealers (PDs). In accordance with the First Bimonthly Monetary Policy Statement 2016-17, the repo rate under the Liquidity Adjustment Facility (LAF) has been reduced by 25 basis points, from 6.75% to 6.50%, effective immediately (April 5, 2016). Consequently, the collateralized liquidity support provided to PDs by the Reserve Bank through the SLF will now be available at the revised repo rate of 6.50%, effective April 5, 2016. The policy was issued by B.K. Bhoi, Principal Adviser.
Key Entities Referenced
Reserve Bank of India: The central bank of India, referred to as Reserve Bank in the text.
Primary Dealers: Financial institutions authorized to deal in government securities.
Dr. Raghuram G Rajan: The Governor of the Reserve Bank of India at the time of the statement.
Liquidity Adjustment Facility (LAF): A tool used by the Reserve Bank of India to manage liquidity in the banking system.
Standing Liquidity Facility: A facility provided by the Reserve Bank of India to Primary Dealers for collateralized liquidity support.
Repo Rate: The rate at which the Reserve Bank of India lends money to commercial banks against the security of government securities.
First Bimonthly Monetary Policy statement 2016-17: Monetary policy statement released by Reserve Bank of India.
B.K. Bhoi: Principal Adviser at Reserve Bank of India.
RBI/2015-16/355 Chaitra 16, 1938(Sake)
REF.No.MPD.BC.380 /07.01.279/2015-16 April 5, 2016
To
All Primary Dealers
Dear Sir/Madam,
Standing Liquidity Facilities for
Primary Dealers
Please refer to the First Bi-monthly Monetary Policy statement 2016-17 by
Dr. Raghuram G Rajan, Governor dated April 5, 2016, in terms of which the repo
rate under the Liquidity Adjustment Facility (LAF) has been reduced by 25 basis
points from 6.75 per cent to 6.50 per cent with immediate effect.
2. Accordingly, the Standing Liquidity Facility provided to Primary Dealers
(PDs) (collateralised liquidity support) from the Reserve Bank would be available
at the revised repo rate, i.e., at 6.50 per cent with effect from April 5, 2016.
Yours faithfully,
(B.K. Bhoi)
Principal Adviser