RBI puts limit on reciprocal facility

 Accordingly, as per the circular, lending/borrowing in call/notice money market including transactions under reciprocal line facility from the fortnight beginning February 7, 2004 should not exceed the prudential limits specified for this purpose.

 Earlier in November 14,2002, the RBI had exempted rupee resources drawn under the facility from prudential limits specified for call/notice money transactions for one year.

 Under a reciprocal line facility foreign banks could borrow from Indian banks to meet their daily rupee fund requirement apart from the inte-rbank market and in turn their parent will be of help to the branch of Indian bank in their respective country as and when they need funds.

 Earlier these borrowings were out of the purview of the limits imposed by the RBI on the call money lending and borrowings by banks.