RBI extends regulatory benefits under SLF-MF scheme to all banks

Mumbai, May 1: The Reserve Bank of India today extended regulatory benefits to all banks including those deploying their own resources to extend liquidity support to the mutual funds under the Special Liquidity Facility for Mutual Funds SLF-MF scheme. This is after the Reserve Bank had announced Rs 50,000-crore SLF-MF scheme to bailout the mutual funds facing redemption pressure.

 

 

The scheme was announced in the backdrop of Franklin Templeton Mutual Fund deciding to shut several schemes. RBI said in a release that based on requests received from banks, it has now been decided that the regulatory benefits announced under the SLF-MF scheme will be extended to all banks, irrespective of whether they avail funding from the Reserve Bank or deploy their own resources under the SLF-MF scheme.

 

The RBI further said banks meeting the liquidity requirements of MFs by extending loans and undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial paper , debentures and certificates of deposit held by MFs, will be eligible to claim all the regulatory benefits available under the scheme.

 

"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 statement read.