| |
Moving towards Pure Inter-bank Call/Notice Money Market
|
| |
| Following the recommendations of Narasimham Committee II, in the annual policy Statement of April 2001, the intention to move towards a pure inter-bank call/notice money market by gradually phasing out the non-bank participation was announced. |
| |
| In the annual policy Statement of April 2003, daily lending of non-bank participants in call/notice money market was reduced from 85 per cent to 75 per cent. |
| |
| In view of further market developments as also to move towards a pure inter-bank call/notice money market, it is proposed that: |
| |
| With effect from the fortnight beginning December 27, 2003, non-bank participants would be allowed to lend, on average in a reporting fortnight, up to 60 per cent of their average daily lending in call/notice money market during 2000-01. |
| |
| The time-table for further phasing out of non-bank participation will be announced in consultation with market participants. |
| |
| In case a particular non-bank institution has genuine difficulty in developing proper alternative avenues for deployment of excess liquidity because of its size, RBI may consider providing temporary permission to lend a higher amount in call/notice money market for a specific period on a case-by-case basis. |
| |
Rationalisation of Standing Facilities
|
| |
| Banks are eligible for standing facility (export credit eligible for refinance) and PDs are eligible for collateralised liquidity support from RBI subject to certain limits. |
| |
These limits are split into
|
