Current · Source: Reserve Bank of India · RBI/2009-10/192 · issued 27 Oct 2009 · ~1 min read
Quick answerRBI has discontinued the special term repo facility for scheduled commercial banks (excluding RRBs) and primary dealers, effective immediately. Outstanding liabilities under this facility cannot be rolled over on maturity.
The rule, in the simplest words
Banks cannot borrow new money from RBI using the special term repo (a short-term loan from RBI) anymore.
Any old loans under this facility must be paid back on time; banks cannot extend them by rolling over (taking a new loan to pay the old one).
This rule affects all scheduled commercial banks (except RRBs) and primary dealers (companies that trade government bonds).
Banks must find other ways to get money for lending to mutual funds, NBFCs (non-bank finance companies), and HFCs (housing finance companies), like regular repo (normal short-term loans) or market borrowings.
How it plays out — a real example
A treasury officer in Indore used to rely on the special term repo to get cheap funds from RBI for lending to a local NBFC. Now, with the facility discontinued, she must arrange money from regular repo or borrow from the market, making her lending to the NBFC more expensive and requiring careful planning to avoid a funding gap.
What changed
The special term repo facility, previously available for banks to fund mutual funds, NBFCs, and HFCs, has been discontinued with immediate effect. Banks cannot roll over any outstanding liabilities under this facility upon maturity.
What it means for you
Banks lose a dedicated liquidity window for lending to mutual funds, NBFCs, and HFCs, potentially tightening funding for these sectors. This aligns with the monetary policy stance to normalize liquidity measures as the crisis-era support is withdrawn.
What you must do
Cease any new borrowing under the special term repo facility immediately.
Ensure outstanding liabilities under this facility are repaid at maturity without rollover.
Review alternative funding sources for mutual funds, NBFCs, and HFCs, such as regular repo or market borrowings.
Who it affects
All scheduled commercial banks (excluding RRBs), Primary dealers
❓ Common questions
What is the effective date of this discontinuation?
The discontinuation is effective immediately from October 27, 2009, as announced in the Second Quarter Review of Monetary Policy 2009-10.
Can we roll over existing borrowings under this facility?
No, outstanding liabilities under the special term repo facility cannot be rolled over on maturity and must be repaid.
Does this affect all scheduled commercial banks?
Yes, all scheduled commercial banks except Regional Rural Banks (RRBs) are affected, along with primary dealers.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/192
FMD.MOAG.No.41/01.01.01/2009-10
October 27, 2009
All Scheduled Commercial Banks (excluding RRBs)
and Primary Dealers
Dear Sir,
SPECIAL TERM REPO FACILITY
Please refer to our circular FMD.MOAG.NO.35/01.01.01/2008-09 dated April 21, 2009 on the captioned subject.
2. As announced in the Second Quarter Review of Monetary Policy 2009-10, it has been decided to discontinue the special term repo facility for scheduled commercial banks for funding to mutual funds, non-banking financial companies and housing finance companies with immediate effect.
3. The outstanding liabilities of scheduled commercial banks under this facility shall not be rolled-over on maturity.
Yours sincerely,
(P. Krishnamurthy)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/192 · issued 27 Oct 2009. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks (excluding RRBs), Primary dealers), your first concrete step on “Special Term Repo Facility Discontinued” is: “Cease any new borrowing under the special term repo facility immediately.” (RBI issued this 27 Oct 2009).
Circular: RBI/2009-10/192 -- Special Term Repo Facility Discontinued
Issued: 27 Oct 2009
Action required: Cease any new borrowing under the special term repo facility immediately.
Action required: Ensure outstanding liabilities under this facility are repaid at maturity without rollover.
Action required: Review alternative funding sources for mutual funds, NBFCs, and HFCs, such as regular repo or market borrowings.
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 03 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=5328&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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