Home › Circulars › RBI/2012-2013/448

RBI Cuts LAF/MSF Margins on G-Secs and SDLs

Current · Source: Reserve Bank of India · RBI/2012-2013/448 · issued 19 Mar 2013 · ~1 min read
Quick answerRBI reduced margin requirements for LAF and MSF: Central Government securities/Treasury Bills from 5% to 4%, and State Development Loans from 10% to 6%, effective April 2, 2013. This lowers collateral needed for liquidity availed from RBI.
The rule, in the simplest words
How it plays out — a real example

Ravi, a treasury head at a mid-sized bank, updates his collateral calculator before April 2. When his bank bids for Rs. 500 crore under LAF, he now pledges Rs. 520 crore of G-Secs instead of Rs. 525 crore, freeing up Rs. 5 crore for other operations.

What changed

The margin requirement for Central Government dated securities and Treasury Bills under LAF and MSF was reduced from 5% to 4%. For State Development Loans, the margin was cut from 10% to 6%. The change takes effect from April 2, 2013.

What it means for you

Banks and primary dealers will need to pledge less collateral to borrow under LAF and MSF, freeing up securities for other uses. This improves liquidity management efficiency and reduces the cost of accessing RBI liquidity windows.

What you must do

Who it affects

Scheduled Commercial Banks (excluding RRBs), Primary Dealers, Treasury and collateral management teams

❓ Common questions

Regulatory timeline

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

What are the new margin rates for LAF and MSF?

For Central Government dated securities and Treasury Bills, the margin is 4%. For State Development Loans, it is 6%.

When does the change take effect?

The revised margins come into force from April 2, 2013.

How does this affect the amount of securities I need to pledge?

For a bid of Rs. 100 crore, you now pledge Rs. 104 crore of G-Secs/T-Bills or Rs. 106 crore of SDLs, instead of Rs. 105 crore and Rs. 110 crore respectively.

📜 Read the original circular — full text as issued by RBI
Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 23 kb ) Liquidity Adjustment Facility and Marginal Standing Facility RBI/2012-2013/448 FMD.MOAG No. 77 /01.01.001/2012-13 March 19, 2013 All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers Madam / Sir, Liquidity Adjustment Facility and Marginal Standing Facility Please refer to Reserve Bank circulars IDMD.OMO No.08/03.75.00/2004-05 dated October 27, 2004 , FMD.MAOG.No.13/01.01.001/2006-07 dated March 30, 2007 and FMD.No.59/01.18.001/2010-11 dated May 9, 2011 . 2. As you may be aware, the margin requirements under the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) in respect of Central Government dated securities/ Treasury Bills and State Development Loans (SDLs) currently stand at 5 per cent and 10 per cent respectively. 3. On a review, it has been decided to revise the margin requirements under LAF and MSF operations. Accordingly, the margin requirements in respect of Central Government dated securities/ Treasury Bills and State Development Loans (SDLs) will be 4 per cent and 6 per cent respectively. Thus, the amount of securities offered on acceptance of a bid/ application for Rs.100 crore will be Rs 104 crore (face value) of Central Government dated security/ Treasury Bills or Rs. 106 crore (face value) of SDLs as the case may be. 4. The revised margin requirements would come into force with effect from April 2, 2013. All other terms and conditions of the current LAF and MSF schemes will remain unchanged. Yours sincerely (G Mahalingam) Chief General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-2013/448 · issued 19 Mar 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💰 Credit
  • Update internal systems and collateral management processes to reflect the new margin rates effective April 2, 2013.
  • Recompute eligible collateral for LAF/MSF bids to avoid over-pledging securities.
📜 Compliance
  • Inform treasury and back-office teams about the revised margin requirements for G-Secs, T-Bills, and SDLs.
  • Review existing LAF/MSF agreements to ensure alignment with the revised margins.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Credit Manager at a bank this circular applies to (Scheduled Commercial Banks (excluding RRBs), Primary Dealers, Treasury and collateral management teams), your first concrete step on “RBI Cuts LAF/MSF Margins on G-Secs and SDLs” is: “Update internal systems and collateral management processes to reflect the new margin rates effective April 2, 2013.” (RBI issued this 19 Mar 2013).

  1. Circular: RBI/2012-2013/448 -- RBI Cuts LAF/MSF Margins on G-Secs and SDLs
  2. Issued: 19 Mar 2013
  3. Action required: Update internal systems and collateral management processes to reflect the new margin rates effective April 2, 2013.
  4. Action required: Recompute eligible collateral for LAF/MSF bids to avoid over-pledging securities.
  5. Action required: Inform treasury and back-office teams about the revised margin requirements for G-Secs, T-Bills, and SDLs.
  6. Action required: Review existing LAF/MSF agreements to ensure alignment with the revised margins.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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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=7899&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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