The Reserve Bank of India (RBI) on Thursday decided that regulatory benefits announced under the special liquidity facility for mutual funds (SLF-MF) scheme will be extended to all banks, irrespective of whether they avail funding from the central bank or deploy their own resources under the scheme.
Banks meeting the liquidity requirements of mutual funds by extending loans and undertaking outright purchase or repos against the collateral of investment-grade corporate bonds, commercial papers, debentures and certificates of deposit held by mutual funds will be eligible to claim all regulatory benefits
A bank claiming regulatory benefits will be required to submit a weekly statement containing consolidated information on entity-wise and instrument-wise loans and advances extended or investment made to eligible entities to financial markets and the Department of Supervision on every Monday till the closure of the scheme.
On April 27, the RBI had announced the SLF-MF to ease liquidity strains on mutual funds, which intensified in the wake of redemption pressures related to the closure of some debt mutual funds and potential contagious effects.
In another announcement, the central bank extended amended trading hours from 10 am to 2 pm for RBI-regulated markets until further notice.
"There is a likelihood of an extension of lockdown in major cities like Mumbai or easing of the restrictions in a limited manner," it said adding the decision has been taken in view of persisting operational dislocations and elevated levels of health risks warranting continuing restrictions on movement, work from home arrangements and business continuity plans.
"Market trading timings will be reviewed on the issuance of directions pertaining to lockdown from the government," it added.