Business

RBI to conduct more frequent term repos

August 23, 2014 10:16 PM

The Reserve Bank of India (RBI) on Friday came out with a new regime for liquidity management to keep overnight rates close to the repo rate and entice banks to do more efficient liquidity management. Under the revised framework, RBI would conduct more frequent term repos. The central bank could also choose to sell part of the cash balances of the government for liquidity in the system.

The banking regulator has retained the overall borrowing limit under term repo to 0.75 per cent of banks' net demand and time liabilities (NDTL) and 0.25 per cent of banks' NDTL for overnight repos.

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