RRBs to have access to LAF, MSF Call and Notice Money - RBI Governor's Statement

RRBs to have access to LAF, MSF  Call and Notice Money - RBI Governor's Statement

I had been advocating at various fora for money market access to Regional Rural Banks through Repo, Reverse Repo, Call and Notice Money. My recent article on "Profitability of Regional Rural Banks" published in International Journal of Trends in Scientific Research and Development" has also highlighted this issue. The statement of RBI Governor on 4th December 2020, has found the reference for extending these facilities to Regional Rural Banks, This will make treasury operations of the Regional Rural Banks more efficient. The statement reads as under: 

"The Regional Rural Banks (RRBs) are currently not permitted to access the liquidity windows of the Reserve Bank as well as the call/notice money market. With a view to expanding participation in money markets and to facilitate better liquidity management, Regional Rural Banks will be allowed to access the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) of the RBI; and also the Call/Notice money market".

A long standing demand of Regional Rural Banks has been accepted. My sincere thanks to Governor Reserve Bank of India for the initiative. 


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