After banks and NBFCs, the Reserve Bank of India (RBI) has now decided to facilitate a more efficient liquidity management in Regional Rural Banks (RRBs).
Accordingly, the apex bank has decided to extend the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) to RRBs. It has also decided to permit the RRBs to participate in the Call/Notice money market, both as borrowers and lenders.
RRBs are currently not permitted to access the liquidity windows of the Reserve Bank as well as the call/notice money market.
RBI will issue instructions on liquidity enhancing measures for RRBs soon.