Current · Source: Reserve Bank of India · RBI/2008-2009/112 · issued 31 Jul 2008 · ~1 min read
Quick answerRBI introduces a second Liquidity Adjustment Facility (SLAF) on reporting Fridays, effective August 1, 2008, to help banks fine-tune reserve management on the last day of the maintenance period. The SLAF runs from 4:00 PM to 4:30 PM, with results by 5:00 PM, and settles separately from the regular LAF.
What changed
RBI added a second LAF auction on reporting Fridays, conducted in the afternoon (4:00-4:30 PM) instead of the usual morning slot. If the reporting Friday is a Mumbai bank holiday, the SLAF moves to the preceding working day. Settlement for SLAF is separate and on a gross basis, while all other LAF terms remain unchanged.
What it means for you
Banks now get an extra window on reporting Fridays to adjust their reserves more precisely at the end of the maintenance period. This reduces the risk of last-minute liquidity mismatches and helps avoid penalties for reserve shortfalls. The separate gross settlement ensures clarity in accounting for each facility.
What you must do
Update your treasury operations to participate in the SLAF auction on reporting Fridays between 4:00 PM and 4:30 PM.
Ensure separate settlement processes for LAF and SLAF transactions on a gross basis.
Monitor RBI circulars for any future modifications to SLAF terms based on experience.
Acknowledge receipt of this circular via email as instructed.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Primary Dealers
❓ Common questions
Regulatory timeline
Stated effective dateeffective August 1, 2008
Decoded by BankPulse2026-06-19 12:56 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
When does the SLAF become effective?
The SLAF is effective from August 1, 2008, and applies to all reporting Fridays.
What happens if reporting Friday is a bank holiday in Mumbai?
In that case, the SLAF will be conducted on the immediate preceding working day.
How is SLAF settlement different from regular LAF?
SLAF settlement is conducted separately from the regular LAF and on a gross basis, meaning each transaction is settled individually.
📜 Read the original circular — full text as issued by RBI
RBI/2008-2009/112
FMD.No. 24 /01.01.01/2008-09
July
31, 2008
All Scheduled Commercial Banks (excluding RRBs) and Primary
Dealers
Dear Sir,
SECOND Liquidity Adjustment
Facility on Reporting Fridays
At present, 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.
2. In
response to suggestions from the market participants for fine-tuning the management
of bank reserves on the last day of the maintenance period, it has been decided
to introduce a second LAF (SLAF) on reporting Fridays, with effect from August
1, 2008. SLAF will be conducted between 4.00 P.M. and 4.30 P.M. The auction results
will be announced by 5.00 P.M.
3. In case the reporting
Friday is a Bank holiday in Mumbai, then the SLAF would be conducted on the immediate
preceding working day.
4. The salient features of the SLAF
are same as those of LAF. However, the settlement for LAF and SLAF will be conducted
separately and on a gross basis.
5. The other terms and
conditions for LAF remain as notified by our earlier circulars: IDMD.OMO.No.8/03.75.00/2004-05
dated October 27, 2004 , FMD.MOAG.No.4
/01.01.01/2005-06 dated February 10, 2006 , and FMD.MOAG.
No.13/01.01.01/2006-07 dated March 30, 2007 .
6. SLAF
will be subject to review and modifications as necessary, based on experience.
7.
Please acknowledge receipt by e-mail .
Yours
faithfully
(Chandan Sinha)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-2009/112 · issued 31 Jul 2008. The plain-English explanation above is BankPulse’s own independent summary.
Update your treasury operations to participate in the SLAF auction on reporting Fridays between 4:00 PM and 4:30 PM.
Ensure separate settlement processes for LAF and SLAF transactions on a gross basis.
📜 Compliance
Monitor RBI circulars for any future modifications to SLAF terms based on experience.
Acknowledge receipt of this circular via email as instructed.
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), your first concrete step on “Second LAF on Reporting Fridays from Aug 1, 2008” is: “Update your treasury operations to participate in the SLAF auction on reporting Fridays between 4:00 PM and 4:30 PM.” (RBI issued this 31 Jul 2008).
Circular: RBI/2008-2009/112 -- Second LAF on Reporting Fridays from Aug 1, 2008
Issued: 31 Jul 2008
Action required: Update your treasury operations to participate in the SLAF auction on reporting Fridays between 4:00 PM and 4:30 PM.
Action required: Ensure separate settlement processes for LAF and SLAF transactions on a gross basis.
Action required: Monitor RBI circulars for any future modifications to SLAF terms based on experience.
Action required: Acknowledge receipt of this circular via email as instructed.
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
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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=4389&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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