SLR above 25% must for LAF: Mohan

Rakesh Mohan, Deputy Governor of Reserver Bank of India (RBI),
today said banks need to maintain statutory liquidity ratio (SLR) holdings in excess of 25% to effectively participate in the Liquidity Adjustment Facility (LAF).

"LAF is a collateralised facility, and banks need to have SLR holding in excess of minimum 25% to participate in it," Mohan said.

LAF involves repo and reverse repo auctions as a means to inject or absorb liquidity, respectively.

On the liquidity concern, he said: "We have adequate instruments to maintain it."