No longer current — withdrawn, no replacement on file yet
RBI's own words: “the earlier instructions issued vide our circular RBI/2013-14/142/FMD.MOAG.No. 80/01.01.001/2013-14 dated July 16, 2013 regarding cap on overall allocation of funds at Rs. 75,000 crore under LAF stand withdrawn.” — RBI/2013-2014/152
Source: Reserve Bank of India · RBI/2013-14/142 · issued 16 Jul 2013 · ~2 min read
Quick answerRBI caps total LAF funds at 1% of banking system NDTL (₹75,000 crore) from July 17, 2013. Individual bank allocation is proportional to bids within this ceiling. Morning and additional repo auctions share the combined cap.
The rule, in the simplest words
The RBI caps total LAF funds at 1% of banking system NDTL (₹75,000 crore) from July 17.
Individual bank allocation is proportional to bids within this ceiling.
The cap applies to both morning and additional repo auctions together.
How it plays out — a real example
A branch operations officer in Indore, Mr. Kumar, needs to adjust his liquidity planning to account for the combined ₹75,000 crore cap across morning and additional repo auctions. He ensures sufficient eligible collateral securities are in his RC account before submitting his bid to avoid any issues. As a result, he successfully manages his bank's liquidity and meets the RBI's requirements.
What changed
The overall LAF allocation is now limited to 1% of the banking system's Net Demand and Time Liabilities, set at ₹75,000 crore. Individual banks get funds in proportion to their bids, subject to this ceiling. The cap applies to both morning and additional repo auctions together; if the morning auction uses the full ₹75,000 crore, no evening repo auction will be held.
What it means for you
Banks face tighter liquidity access as the total LAF borrowing is capped, potentially increasing short-term funding costs. Proportional allocation may lead to smaller allotments for individual bidders if aggregate demand exceeds the ceiling. The combined cap on morning and additional repo auctions reduces flexibility on reporting Fridays.
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
Ensure sufficient eligible collateral securities are in your RC account before bid submission.
Adjust liquidity planning to account for the combined ₹75,000 crore cap across morning and additional repo auctions.
Monitor bid amounts to avoid exceeding the proportional allocation limit.
Prepare for possible absence of evening repo auction if morning auction exhausts the cap.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Standalone Primary Dealers
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the new LAF allocation limit?
The overall allocation under LAF is capped at 1% of the banking system's Net Demand and Time Liabilities, which is set at ₹75,000 crore for this purpose.
How will individual bank allocation be determined?
Allocation to each bank will be made in proportion to its bid amount, subject to the overall ceiling of ₹75,000 crore.
Does the cap apply to both morning and additional repo auctions?
Yes, the ₹75,000 crore cap applies to the combined allocation from morning and additional LAF repo auctions. If the morning auction uses the full amount, no evening repo auction will be conducted.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “the earlier instructions issued vide our circular RBI/2013-14/142/FMD.MOAG.No. 80/01.01.001/2013-14 dated July 16, 2013 regarding cap on overall allocation of funds at Rs. 75,000 crore under LAF stand”
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/142
FMD.MOAG. No. 80/01.01.001/2013-14
July 16, 2013
All Scheduled Commercial Banks (excluding RRBs) and Standalone Primary Dealers
Dear Sir,
Liquidity Adjustment Facility
As you are aware, Reserve Bank of India announced various measures yesterday to address the exchange rate volatility. As a part of the measures, it has been decided that the overall allocation of funds under the LAF will be limited to one per cent of the Net Demand and Time Liabilities (NDTL) of the banking system, reckoned as Rs.75,000 crore for this purpose. The allocation to individual banks will be made in proportion to their bids, subject to the overall ceiling. This change in LAF will come into effect from July 17, 2013.
2. It is advised that the scheduled commercial banks (excluding RRBs) and standalone primary dealers should ensure that sufficient amount of eligible collateral securities are available in their RC account at the time of bid submission to cover their bids .
3. Presently, additional LAF repo is conducted on reporting Fridays. Under the revised arrangement, the cap of Rs 75,000 crore will apply to the combined allocation of funds through morning and the additional LAF repo auctions. Accordingly, if the allotted amount in morning repo auction amounts to Rs 75,000 crore, then there would be no evening repo auction on that day.
4. All other terms and conditions of the current LAF scheme will remain unchanged.
5. Please acknowledge receipt.
Yours sincerely
(G. Mahalingam)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/142 · issued 16 Jul 2013. The plain-English explanation above is BankPulse’s own independent summary.
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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=8246&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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