Mumbai, Sep 17 (UNI) Banks lapped up the second Liquid Adjustment Facility (LAF) thrown upon by the RBI from today to tide over the transient pressures on domestic money and forex markets, bidding Rs 29,665 crore.
The second LAF held between 1600 and 1630 hrs had 36 bidders raising RS.29,665 crore from the RBI at fixed nine per cent Repo Auction (Purchase of securities by RBI).
In the morning RBI sold Rs.29,815 cr, taking the total LAF auction amount to Rs.59,480 cr.
In addition to single LAF auctions on a daily basis, the RBI to fine tune the management of bank reserves on the last day of the maintenance period, a second LAF (SLAF) on reporting Fridays, was introduced with effect from August 1, 2008. The SLAF is conducted between 4.00 PM and 4.30 PM. The salient features of SLAF are same as those of LAF. However, the settlement for the LAF and SLAF is conducted separately and on gross basis.
The second LAF would be conducted on a daily basis until further notice in view oif the current liquidity conditions. The Reserve Bank would continue to reserve the right to accept or reject any or all of the tenders received under LAF/SLAF, wholly or partially, without assigning any reason.
UNI VK OBB NP1850