Temporary Liquidity Support for Agricultural Operations Extended
Current · Source: Reserve Bank of India · RBI/2008-09/266 · issued 03 Nov 2008 · ~1 min read
Quick answerRBI extends temporary liquidity support for agricultural operations until December 5, 2008, with interest now linked to the prevailing fixed repo rate under LAF. All other terms from the October 15, 2008 circular remain unchanged.
The rule, in the simplest words
Banks can borrow short-term money from RBI to give loans to farmers until December 5, 2008.
The interest rate on this borrowed money is now the same as the repo rate (the rate at which RBI lends to banks).
All other rules from the earlier circular (October 15, 2008) still apply, like how much banks can borrow and how to use it.
How it plays out — a real example
An agri & priority-sector lending officer in Indore, Priya, needs to lend more to farmers for the winter crop. She checks the new RBI rule and sees she can borrow from RBI at the current repo rate (say 7.5%) until December 5, 2008. This helps her offer cheaper loans to farmers without straining her bank's cash.
What changed
The facility for temporary liquidity support for financing agricultural operations, initially set to expire earlier, has been extended up to December 5, 2008. The interest rate on this support has been revised to the prevailing fixed repo rate under the Liquidity Adjustment Facility (LAF), replacing any previous rate.
What it means for you
Banks can continue accessing short-term liquidity from RBI for agricultural lending at a rate tied to the repo rate, which may lower their funding costs if the repo rate is favorable. This extension supports timely credit flow to the agriculture sector during the current season, helping banks meet priority sector targets without immediate liquidity strain.
What you must do
Update internal systems to apply the prevailing fixed repo rate under LAF for this liquidity support.
Communicate the revised interest rate and extended deadline (December 5, 2008) to relevant treasury and agricultural lending teams.
Ensure all other conditions from the October 15, 2008 circular are still being followed.
Monitor the repo rate movements to accurately calculate interest on availed support.
Who it affects
All scheduled banks, NABARD, Agricultural lending departments, Treasury departments
❓ Common questions
What is the new interest rate for this liquidity support?
The interest rate is now the prevailing fixed repo rate under the Liquidity Adjustment Facility (LAF), as revised by RBI.
Until when is this facility available?
The temporary liquidity support is available up to December 5, 2008.
Are any other terms changed besides the rate and deadline?
No, all other conditions from the earlier circular dated October 15, 2008 remain unchanged.
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/266
RPCD.PLFS . No. BC. 60 /05.04.02/2008-09
November 3, 2008
The Chairmen/Chief Executives of
all Scheduled Banks / NABARD
Dear Sirs,
Temporary liquidity support for financing agricultural operations
Please refer to our circular RPCD.PLFS. No. BC. 45 /05.04.02/2008-09 dated October 15, 2008 , on the captioned subject.
2. Reserve Bank has since decided to extend the facility of temporary liquidity support for financing agricultural operations, as mentioned therein, for a period up to December 5, 2008 . The rate of interest on the temporary liquidity support, as mentioned therein, has also been revised. Accordingly, the rate of interest on the above facility would be the prevailing fixed repo rate under LAF .
3. All other conditions of the above circular remain unchanged.
Yours faithfully,
(B.P. Vijayendra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/266 · issued 03 Nov 2008. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems to apply the prevailing fixed repo rate under LAF for this liquidity support.
📜 Compliance
Communicate the revised interest rate and extended deadline (December 5, 2008) to relevant treasury and agricultural lending teams.
Ensure all other conditions from the October 15, 2008 circular are still being followed.
Monitor the repo rate movements to accurately calculate interest on availed support.
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 IT/Systems lead at a bank this circular applies to (All scheduled banks, NABARD, Agricultural lending departments, Treasury departments), your first concrete step on “Temporary Liquidity Support for Agricultural Operations Extended” is: “Update internal systems to apply the prevailing fixed repo rate under LAF for this liquidity support.” (RBI issued this 03 Nov 2008).
Circular: RBI/2008-09/266 -- Temporary Liquidity Support for Agricultural Operations Extended
Issued: 03 Nov 2008
Action required: Update internal systems to apply the prevailing fixed repo rate under LAF for this liquidity support.
Action required: Communicate the revised interest rate and extended deadline (December 5, 2008) to relevant treasury and agricultural lending teams.
Action required: Ensure all other conditions from the October 15, 2008 circular are still being followed.
Action required: Monitor the repo rate movements to accurately calculate interest on availed support.
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=4613&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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