RBI SLF Limit for Standalone Primary Dealers Raised to ₹15,000 Cr
Why in the news
The central bank enlarged the borrowing window for standalone primary dealers and opened every repo tenor to them.
Key facts
- SLF limit for SPDs: ₹10,000 crore to ₹15,000 crore, effective April 2, 2025.
- Borrowing is at the prevailing repo rate.
- SPDs may now take part in all tenors of repo transactions.
About the Standing Liquidity Facility
- A collateralised RBI facility meeting SPDs’ liquidity needs.
- SPDs are market-makers in government securities, so they need adequate funds.
Significance
- More funding sources and a more active market-making role for SPDs.
- Analysts expect minimal impact on G-Secs; the move fits RBI’s wider liquidity management.
Exam angle
- Rate for SLF borrowing: repo rate.
- Beneficiary: Standalone Primary Dealers.