Current · Source: Reserve Bank of India · RBI/2008-09/168 · issued 16 Sep 2008 · ~1 min read
Quick answerRBI expanded the Second Liquidity Adjustment Facility (SLAF) to daily operations from September 17, 2008, to ease short-term money and forex market pressures. Previously limited to reporting Fridays, SLAF now runs every weekday afternoon, giving banks an extra window to manage daily liquidity.
What changed
The Second LAF, previously conducted only on reporting Fridays, was made a daily operation starting September 17, 2008. The afternoon auction window (4:00 PM to 4:30 PM) now runs every weekday until further notice. Settlement for LAF and SLAF remains separate and on a gross basis.
What it means for you
Banks get an additional daily liquidity management tool beyond the morning LAF, helping them fine-tune reserve positions more flexibly. This move signals RBI's intent to address transient liquidity tightness stemming from global market spillovers. Lenders should expect more frequent afternoon auctions and plan their intraday cash flows accordingly.
What you must do
Update treasury operations to participate in daily SLAF auctions from 4:00 PM to 4:30 PM.
Monitor intraday liquidity positions to decide whether to bid in the afternoon window.
Ensure settlement systems can handle separate gross settlements for LAF and SLAF on a daily basis.
Review internal liquidity forecasting models to incorporate the daily SLAF availability.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Primary Dealers, Treasury and ALM desks of banks, RBI's Monetary Operations Department
❓ Common questions
What is the timing for the daily SLAF?
The SLAF auction window is from 4:00 PM to 4:30 PM every weekday, starting September 17, 2008.
Does the SLAF replace the regular morning LAF?
No, the morning LAF (9:30 AM to 10:30 AM) continues as before. SLAF is an additional afternoon window for fine-tuning liquidity.
Can RBI reject bids in the SLAF?
Yes, RBI reserves the right to accept or reject any tender, wholly or partially, without assigning any reason.
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/168
FMD.MOAG.
No. 25/01.01.01/2008-09
September 16, 2008
All Scheduled
Commercial Banks (excluding RRBs)
and Primary Dealers
Dear Sir,
SECOND
LIQUIDITY ADJUSTMENT FACILITY
Please refer to the
market measures announced by the Reserve Bank today i.e. September 16, 2008 to
alleviate transient pressures on domestic money and forex markets which are related
largely to external developments.
2.
At present, the Reserve Bank of India operates a Liquidity Adjustment Facility
(LAF) to inject/absorb liquidity through daily repos/reverse repos auctions. These
operations are conducted in the forenoon between 9.30 A.M. and 10.30 A.M. In addition,
for fine-tuning the management of bank reserves on the last day of the maintenance
period, a second
LAF (SLAF) on reporting Fridays , was introduced
with effect from August 1, 2008. The SLAF is conducted between 4.00 PM and 4.30
PM. The salient features of SLAF are same as those of LAF. However, the settlement
for the LAF and SLAF is conducted separately and on gross basis.
3. In view of the current liquidity conditions, it has been
decided that the SLAF will be conducted on a daily basis, beginning September
17, 2008, till further notice.
4 . The Reserve
Bank would continue to reserve the right to accept or reject any or all of the
tenders received under LAF/SLAF, wholly or partially, without assigning any reason.
5. The other terms and conditions for LAF remain as notified
by our earlier circulars.
Yours faithfully,
(Chandan Sinha)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/168 · issued 16 Sep 2008. The plain-English explanation above is BankPulse’s own independent summary.
Update treasury operations to participate in daily SLAF auctions from 4:00 PM to 4:30 PM.
Ensure settlement systems can handle separate gross settlements for LAF and SLAF on a daily basis.
📜 Compliance
Monitor intraday liquidity positions to decide whether to bid in the afternoon window.
Review internal liquidity forecasting models to incorporate the daily SLAF availability.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an Operations officer at a bank this circular applies to (All Scheduled Commercial Banks (excluding RRBs), Primary Dealers, Treasury and ALM desks of banks, RBI's Monetary Operations Department), your first concrete step on “RBI Makes Second LAF Daily from Sept 17, 2008” is: “Update treasury operations to participate in daily SLAF auctions from 4:00 PM to 4:30 PM.” (RBI issued this 16 Sep 2008).
Circular: RBI/2008-09/168 -- RBI Makes Second LAF Daily from Sept 17, 2008
Issued: 16 Sep 2008
Action required: Update treasury operations to participate in daily SLAF auctions from 4:00 PM to 4:30 PM.
Action required: Monitor intraday liquidity positions to decide whether to bid in the afternoon window.
Action required: Ensure settlement systems can handle separate gross settlements for LAF and SLAF on a daily basis.
Action required: Review internal liquidity forecasting models to incorporate the daily SLAF availability.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4469&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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