New Delhi: The Reserve Bank of India on Thursday announced a series of decisions and said that the regulatory benefits under the Standing Liquidity Facility-Mutual Fund (SLF-MF) scheme will be extended to all banks. The decision was taken in order to ease the liquidity strains on banks amid coronavirus pandemic. Also Read - 'This is What a Failed Lockdown Looks Like', Rahul Gandhi Ups Ante Against Govt Over COVID-19 Crisis
RBI also decided to extend the Fixed Rate Reverse Repo as well as the Marginal Standing Facility (MSF) operations with revised timings as issued March 30, till further notice. “Fixed Rate Reverse Repo and MSF each will function from 9 am to 11:59 pm,” the central regulatory body said in a statement. Also Read - Pakistan Cricketer Taufeeq Umar Recovers From COVID-19, Urges People to Take Virus Seriously
“Banks meeting the liquidity requirements of MFs by (1) extending loans, and (2) undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial paper (CPs), debentures and certificates of deposit (CDs) held by MFs will be eligible to claim all the regulatory benefits available under SLF-MF scheme without the need to avail back to back funding from the Reserve Bank under the SLF-MF,” the RBI said. Also Read - India's Forex Reserves Surge to All-time High of USD 493.48 Billion
Moreover, the central bank also decided that the amended trading hours of 10 AM to 2 PM, that were to be effective till April 30, will be extended until further notice.
However, the RBI has also faced criticism from some experts who claim that the central bank’s efforts may not be effective enough to restore market confidence amid the COVID-19 situation.