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RBI asks banks to ensure sufficient collateral for repo borrowing

RBI had announced late on Monday that it will cap the extent to which banks can borrow money

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Reuters Mumbai
Last Updated : Jul 16 2013 | 7:26 PM IST

The Reserve Bank of India on Tuesday asked banks to ensure that they have sufficient collateral securities in their accounts before submitting bids to borrow under the repo window.

The RBI had announced late on Monday that it will cap the extent to which banks can borrow money from the RBI at Rs 75,000 crore, effective Wednesday, as a step to boost rupee demand and stem the currency's decline.

The RBI also said the cap of Rs 75,000 crore will be applicable to the combined amount in morning and evening repo auctions on reporting Fridays.

If the allotted amount in the morning repo is Rs 75,000 crore, there will be no evening repo on reporting Fridays, it added.

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First Published: Jul 16 2013 | 6:46 PM IST

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