The Reserve Bank of India (RBI) today extended its special measures for easing the monetary supply till April 8, in view of the current liquidity situation.
The special measures, which were announced when liquidity came under pressure due to the festive season and Coal India IPO, were due to expire on January 28.
Under the facility, banks are allowed to sell some of the government securities to the central bank to raise funds. Statutory Liquidity Ratio (SLR), the amount which banks have to park in government securities, was earlier reduced from 25 per cent to 24 per cent.
The facility, which was slated to end on January 28, has been extended up till April 8.
The RBI's special measures enable banks to avail one per cent more funds through the liquidity adjustment facility (LAF), based on their deposits.
"For any shortfall in maintenance of the Statutory Liquidity Ratio (SLR) arising out of availment of this facility, banks may seek waiver of penal interest as an ad hoc measure," it said.
Scheduled commercial banks may avail of additional liquidity support under LAF to the extent of up to 1 per cent of their deposits till April 8, the RBI said in its third quarter policy review.
"The Reserve Bank will constantly monitor the credit growth and, if necessary, will engage with banks which show an abnormal incremental credit-deposit ratio," it said.
