In a bid to ease liquidity management operations, the Reserve Bank of India has introduced Straight Through Processing (STP) in fixed rate LAF Repo, fixed rate LAF Reverse Repo and MSF operations.
This will enable eligible participants to receive the credit or debit immediately on placement of the bids or offers, subject to the availability of the collateral or funds, within the prescribed time window, RBI said in a notification.
There will be no change in the process of placing bids/offers by the eligible participants. The STP will be introduced with effect from August 3, 2015, it added.
Further, RBI assured that automation of these facilities will, in no way, affect the discretionary character of these facilities and the Reserve Bank will continue to determine the extent of liquidity injection/absorption depending upon the prevailing liquidity conditions in the system.
The other terms and conditions for LAF and MSF will remain unchanged.