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RBI Opens Rs 25,000 Cr Special Repo Window for Mutual Fund Liquidity

Current · Source: Reserve Bank of India · RBI/2013-14/143 · issued 17 Jul 2013 · ~1 min read
Quick answerRBI opens a Rs 25,000 crore special repo window for banks to lend to mutual funds. The 3-day repo at 10.25% interest runs alongside LAF and MSF. Banks get SLR waiver up to 0.5% of NDTL for shortfalls. First operation on July 18, 2013.
The rule, in the simplest words
How it plays out — a real example

A treasury officer in Indore, Priya, sees that a local mutual fund is facing redemption pressure. She uses the special repo window to borrow Rs 10 crore from RBI at 10.25% for 3 days, ensuring the fund has cash to pay investors. She also notes that her bank's SLR shortfall of 0.3% of NDTL is waived, saving them from penalty costs.

What changed

RBI introduced a temporary special repo window of Rs 25,000 crore exclusively for banks to meet mutual fund liquidity needs. The facility is separate from existing LAF and MSF operations. It offers a 3-day tenor at 10.25% interest, with bids placed electronically on the CBS platform.

What it means for you

Banks can now access additional liquidity specifically for mutual funds, easing redemption pressures. The SLR waiver of up to 0.5% of NDTL (on top of the 2% MSF waiver) reduces penalty costs for liquidity shortfalls. This temporary measure helps stabilize money markets during stress.

What you must do

Who it affects

All Scheduled Commercial Banks (excluding RRBs), Mutual funds seeking liquidity support, Treasury and ALM desks of banks

❓ Common questions

What is the interest rate on this special repo?

The rate is 10.25% per annum for the 3-day tenor.

Can banks use these funds for purposes other than mutual funds?

No, the funds must be used exclusively for meeting liquidity requirements of mutual funds.

Is the SLR waiver under this facility additional to the MSF waiver?

Yes, banks can get a waiver of penal interest for SLR shortfall up to 0.5% of NDTL, in addition to the 2% waiver allowed under MSF.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/143 FMD.MOAG.No. 81/01.01.001/2013-14 July 17, 2013 All Scheduled Commercial Banks (excluding RRBs) Dear Sir, Special Repo Window for Liquidity Requirement of Mutual Funds As announced today, Reserve Bank of India will be opening a Special Repo window for a notified amount of Rs. 25,000 crore with a view to enabling banks to meet the liquidity requirement of mutual funds. 2. The special repo window will be in addition to the repo/reverse repo auctions conducted under the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) available to the scheduled commercial banks (excluding RRBs). 3. The tenor of the special repo will be three days (excluding the intervening Saturdays and holidays). The rate of interest on amount availed under the special repo will be 10.25 per cent. The first special repo operation for 3-days will be conducted on July 18, 2013 (Thursday) between 2.30PM and 3.00PM with reversal on July 23, 2013 (Tuesday). The second special repo operation will be conducted on July 23, 2013 with reversal on July 26, 2013 (Friday). Subsequent operations will be conducted accordingly at interval of three days (excluding the intervening Saturdays and holidays). The eligible banks may place their bids electronically on the CBS platform during the time bidding window is kept open. The bidding process, settlement and reversal of special repo would be similar to the existing system being followed in case of LAF-Repo and MSF. 4. The total allocation of funds under the special repo will be limited to Rs.25,000 crore. Accordingly, the allocation to individual banks will be made in proportion to their bids, subject to the overall ceiling. It should be strictly ensured that the funds availed under this facility are used exclusively for meeting the liquidity requirements of mutual funds. 5. It is further advised that banks availing the additional liquidity support through the special repo window can seek waiver of penal interest for any shortfall in maintenance of SLR up to 0.5 per cent of their NDTL. This waiver will be available to banks in addition to the two per cent waiver allowed under MSF. 6. The special repo window facility is being made available for a temporary period till further notice. 7. Please acknowledge receipt. Yours sincerely (G. Mahalingam) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/143 · issued 17 Jul 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
⚙️ Operations
  • Prepare for 3-day tenor operations with reversal on the third day (excluding Saturdays and holidays).
📜 Compliance
  • Ensure funds from this special repo are used exclusively for mutual fund liquidity needs.
  • Place bids electronically on the CBS platform during the specified window (2:30-3:00 PM).
  • Track SLR shortfall waivers: up to 0.5% of NDTL under this facility, in addition to MSF waiver.
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 Compliance officer at a bank this circular applies to (All Scheduled Commercial Banks (excluding RRBs), Mutual funds seeking liquidity support, Treasury and ALM desks of banks), your first concrete step on “RBI Opens Rs 25,000 Cr Special Repo Window for Mutual Fund Liquidity” is: “Ensure funds from this special repo are used exclusively for mutual fund liquidity needs.” (RBI issued this 17 Jul 2013).

  1. Circular: RBI/2013-14/143 -- RBI Opens Rs 25,000 Cr Special Repo Window for Mutual Fund Liquidity
  2. Issued: 17 Jul 2013
  3. Action required: Ensure funds from this special repo are used exclusively for mutual fund liquidity needs.
  4. Action required: Place bids electronically on the CBS platform during the specified window (2:30-3:00 PM).
  5. Action required: Track SLR shortfall waivers: up to 0.5% of NDTL under this facility, in addition to MSF waiver.
  6. Action required: Prepare for 3-day tenor operations with reversal on the third day (excluding Saturdays and holidays).
  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=8247&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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