Mumbai, Dec 15 (TIWN) The Reserve Bank of India (RBI) has decided to provide an additional collateralised intra-day liquidity facility for smooth operation of payment system National Electronic Funds Transfer (NEFT) on a round-the-clock basis from December 16, the central bank said.

The RBI provides collateralised liquidity adjustment facility once a day — cut recently from two such facilities a few months back — and banks can borrow additional liquidity under an emergency window called marginal standing facility (MSF).

The central bank recently allowed round-the-clock transfer under NEFT, but banks raised doubts about the settlement issue. The RBI’s new window, exclusively for the settlement purpose, will ease the pressure significantly.

All banks will be eligible for the intraday facility, while the limit for such a facility would be set by the RBI from time to time, it said in a statement.

However, “the outstanding drawing at the end of the day under the LS (liquidity support) facility will be automatically converted into borrowing under the MSF”.