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Special Fixed Rate Repo for Mutual Fund Liquidity

No longer current — replaced by Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)

Source: Reserve Bank of India · RBI/2008-09/220 · issued 14 Oct 2008 · ~1 min read

Quick answerRBI announced a special fixed rate repo at 9% for Rs.20,000 crore on October 14, 2008, to help banks meet mutual fund liquidity needs. Reversal is on October 29, 2008. This is in addition to regular LAF/SLAF auctions.

What changed

RBI introduced a one-time special fixed rate repo of Rs.20,000 crore at 9% per annum, specifically to ease liquidity pressures on mutual funds. The facility is open to scheduled commercial banks (excluding RRBs) and primary dealers, with bids via NDS from 2:30 PM to 3:15 PM on October 14, 2008. Settlement is separate and on a gross basis, with pro-rata allocation if oversubscribed.

What it means for you

This targeted repo injection provides banks with cheap, assured liquidity to on-lend to mutual funds, addressing a specific stress point in the financial system. For lenders, it offers a temporary funding buffer at a fixed rate, but the 15-day tenor requires careful cash flow planning. The move signals RBI's willingness to use unconventional tools to stabilize markets during the 2008 crisis.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Submit bids electronically via NDS between 2:30 PM and 3:15 PM on October 14, 2008, if you need liquidity for mutual fund support.
Ensure eligible securities are available for collateral as per standard LAF terms.
Prepare for separate gross settlement of this repo, distinct from regular LAF operations.
Monitor pro-rata allocation risk if total bids exceed Rs.20,000 crore.

Who it affects

All scheduled commercial banks (excluding RRBs), Primary dealers, Mutual funds (indirectly through bank lending)

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 12:01 IST
Superseded by — Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
Status change: superseded 05 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the interest rate for this special repo?

The special fixed rate repo is offered at 9% per annum, as announced by RBI.

When will this repo be reversed?

The reversal is scheduled for Wednesday, October 29, 2008.

Can RRBs participate in this facility?

No, RRBs are explicitly excluded from this special repo; only scheduled commercial banks (excluding RRBs) and primary dealers are eligible.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Superseded by Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)

📜 Read the original circular — full text as issued by RBI

RBI/2008-09/220

 FMD.MOAG. No. 26/01.01.01/2008-09

 October 14, 2008

 All Scheduled Commercial Banks (excluding RRBs)

 and Primary Dealers

 Dear Sir,

 SPECIAL FIXED RATE REPO UNDER LIQUIDITY ADJUSTMENT FACILITY 

 As already announced, Reserve Bank shall conduct a special fixed rate repo at 9 per cent per annum against eligible securities for a notified amount of Rs.20,000 crore today, i.e. October 14, 2008, with a view to enabling banks to meet the liquidity requirements of Mutual Funds. The reversal shall take place on Wednesday, October 29, 2008.

 2. This repo will be in addition to the repo/reverse repo auctions conducted under Liquidity Adjustment Facility (LAF) and Second Liquidity Adjustment Facility (SLAF) which will be held as usual. 

 3. The eligible banks and PDs may submit their applications electronically through NDS between 2.30 PM to 3.15 PM. today. Allocations would normally be made on a pro-rata basis in case the tenders exceed the notified amount. 

 4. The settlement for the special repo would be conducted separately and on gross basis.

 5. The other terms and conditions for the special repo would remain as notified by our earlier circulars on the Liquidity Adjustment Facility.

 Yours faithfully,

 (Chandan Sinha)

 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/220 · issued 14 Oct 2008. The plain-English explanation above is BankPulse’s own independent summary.

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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=4536&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.