MUMBAI, March 19 (Reuters) - The Reserve Bank of India on
Tuesday eased banks' margin requirements for borrowing under its
repo window, in a bid to help the lenders tide over the cash
Under the central bank's Liquidity Adjustment Facility (LAF)
and Marginal Standing Facility (MSF), banks will be able to
pledge their federal government bonds and treasury bills with a
margin requirement of 4 percent from the current norm of 5
percent, the RBI said.
For state development loans, the margin requirement will
drop to 6 percent from 10 percent, it said.
The changes will be effective from April 2, the RBI said.
The banking system is facing acute liquidity shortage with
banks borrowing over a trillion rupees on an average over the
last one week.
(Reporting by Neha Dasgupta; Editing by Subhranshu Sahu)