MUMBAI: The Reserve Bank of India (RBI) has decided to provide an additional collateralised intra-day liquidity (IDL) facility called liquidity support (LS) in order to ensure a 24/7 functioning of the National Electronic Funds Transfer (NEFT) from December 16.
The LS facility will be available for facilitating NEFT settlements, on a 24×7 basis and will operate as per the same terms and conditions as the Intra-Day Liquidity (IDL) facility. A statement from RBI said that all member banks eligible for the IDL facility will be eligible to avail of the LS facility.
“In order to facilitate smooth settlement of NEFT transactions in the accounts of the member banks maintained with the Reserve Bank in a 24×7 environment, it has been decided to provide an additional collateralised intra-day liquidity facility, to be called Liquidity Support (LS),” RBI said in a notification.
The limit for the LS facility would be set by the Reserve Bank from time to time and the drawings under the LS facility will be reckoned as part of the eligible IDL limit.
“The margin requirement on LS facility would be similar to that of IDL facility. Outstanding drawing at the end of the day under the LS facility will be automatically converted into borrowing under the Marginal Standing Facility (MSF),” the RBI explained further.