With a view to addressing the expected tightening of liquidity conditions in March on account of advance tax payments by corporates and in order to provide flexibility to the banking system in its liquidity management towards March-end 2016, the Reserve Bank of India will inject adequate additional liquidity using a combination of appropriate instruments, while continuing with its normal Liquidity Adjustment Facility (LAF) operations. Based on a continuous assessment of the evolving liquidity conditions, the tenor and magnitude of additional liquidity operations will be announced a few days in advance of each tranche.

As a special case, Standalone Primary Dealers will be allowed to participate along with other eligible participants in four regular term repo auctions to be conducted during the fortnight starting from March 19, 2016 within the usual notified amount. The dates of auctions and the notified amount under each auction will be announced in due course.

Alpana Killawala
Principal Adviser

Press Release : 2015-2016/1906