LAF gets lukewarm response fromBanks

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Mumbai, Oct 20 (UNI) Despite RBI cutting the repo rate by one per cent to eight per cent, the two two-day Liquidity Adjustment Facility (LAF) auctions held today received lukewarm response, with only five banks parking their securities with the RBI to raise Rs 2,800 crore today.

The second LAF auctions saw some activity after the rate cut, while the first one drew a blank.

RBI offered two-day repo and reverse repo LAF today, following the strike call given by RBI employees and officers tomorrow, seeking higher pensions. RBI had already declared the strike as illegal.

On the contrary, the reverse repo facility in which RBI sells securities at six per cent 30 offers were accepted for Rs 27,695 crores, according to data provided by the RBI.

The 14-day eight per cent special repo, which had an offer of Rs 12.995 crore to enable banks to bale out mutual funds on their redemption woes, saw only three offers being accepted for a total value of Rs 1,545 crore.

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