No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2020-21/76 · issued 04 Dec 2020 · ~1 min read
Quick answerRBI now allows Scheduled RRBs with CBS, 9% CRAR, and FMOD compliance to access LAF and MSF for better liquidity management. A positive/negative list will be shared, and effective dates will follow.
What changed
RBI extended Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) to Scheduled Regional Rural Banks (RRBs) meeting specific criteria. Eligible RRBs must have implemented Core Banking Solution (CBS), maintain a minimum CRAR of 9%, and fully comply with FMOD terms. RBI will issue a positive list of eligible banks and a negative list of ineligible ones, with ongoing review of eligibility.
What it means for you
This gives RRBs a new tool for managing short-term liquidity, reducing their reliance on informal or costly sources. Banks that meet the criteria can now access repo and MSF windows, improving their ability to handle cash flow mismatches. Lenders should prepare to meet the compliance requirements to avoid being on the negative list.
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 your RRB has implemented CBS and maintains CRAR above 9%.
Review and comply with all FMOD terms and conditions for LAF/MSF.
Monitor RBI communications for the positive/negative list and effective date.
Prepare internal liquidity management processes to utilize LAF/MSF once eligible.
Who it affects
Scheduled Regional Rural Banks (RRBs), RBI Financial Markets Operations Department (FMOD), RRB treasury and compliance teams
RBI’s words: “DOR.RRB.No.28/31.01.001/2020-21 dated December 4, 2020”
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #334: DOR.RRB.No.28/31.01.001/2020-21 — "Introduction of Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) for Regional Rural Banks (RRBs)" da”
📜 Read the original circular — full text as issued by RBI
RBI/2020-21/76
DOR.RRB.No.28/31.01.001/2020-21
December 4, 2020
All Regional Rural Banks
Madam/ Sir,
Introduction of Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) for Regional Rural Banks (RRBs)
In order to provide an additional avenue for liquidity management to Regional Rural Banks (RRBs), it has been decided that Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) will be extended to Scheduled RRBs meeting the following criteria:
Implemented Core Banking Solution (CBS)
There is a minimum CRAR of nine per cent and
Fully compliant with the terms and conditions for availing LAF and MSF issued by Financial Markets Operations Department (FMOD), Reserve Bank of India.
2. The names of RRBs which meet the eligibility norms to participate in LAF and MSF (Positive List) and of those RRBs found ineligible (Negative List) will be intimated to the banks concerned. The eligibility status of the banks will be reviewed on an ongoing basis.
3. The effective date from which the RRBs will be eligible to avail of LAF and MSF will be intimated separately.
Yours faithfully,
(Thomas Mathew)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2020-21/76 · issued 04 Dec 2020. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=12004&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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