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RBI extends benefits under special liquidity facility for MFs to all banks

Decision taken based on requests received from banks; exposures under this facility will not be reckoned under large exposure framework or for determining priority sector targets

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The liquidity availed under this window could be classified as held-to-maturity (HTM) even beyond 25 per cent of the total investment permitted in the HTM portfolio

Abhijit Lele Mumbai
Banks that meet the liquidity needs of mutual funds without using RBI’s special liquidity facility for MFs (SLE-MFs), will also get the regulatory benefits available to those that are tapping this special window.

The decision was taken based on requests received from banks, RBI said in a statement. Banks using their own funds to meet liquidity needs of MFs by extending loans, and purchasing investment-grade corporate bonds, commercial paper (CPs), debentures and certificates of deposit (CDs) held by MFs can claim the regulatory benefits available under SLF-MF scheme.

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First Published: Apr 30 2020 | 2:37 PM IST

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