Glitch In RBI's ASISO System: Lending And Borrowing From Apex Bank Affected

Glitch In RBI's ASISO System: Lending And Borrowing From Apex Bank Affected

According to bank treasury officials, a technical issue with the Automated Sweep-In and Sweep-Out System (ASISO), which enables lenders to manage their daily liquidity requirements with the Reserve Bank of India, was fixed on Wednesday.

G R MukeshUpdated: Thursday, June 13, 2024, 03:42 PM IST
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According to bank treasury officials, a technical issue with the Automated Sweep-In and Sweep-Out System (ASISO), which enables lenders to manage their daily liquidity requirements with the Reserve Bank of India, was fixed on Wednesday.

On Tuesday, the ASISO system, which banks use to borrow from the central bank's 'Marginal Standing Facility' and deposit money at its 'Standing Deposit Facility', had its first malfunction since it was established almost four years ago. According to the banks, the central bank will look into the matter to determine what caused the outage.

"There was a technical issue with ASISO on Tuesday, which is essentially used for lending and borrowing to the RBI. There was no trigger for the transactions.

They found the problem and fixed it. RBI was able to resolve it by the second half." 4.5 per cent of Indian banks' net deposits must be deposited with the central bank, and they must maintain a minimum of 90 per cent of this requirement every day. In times of low liquidity, banks have access to funds from the central bank through the Marginal Standing Facility (MSF).

Introduced in 2020 amidst the COVID-19 pandemic, ASISO (Automated Sweep-In and Sweep-Out System) streamlines banks' liquidity management procedures through automation.

What is ASISO?

For banks in India, the automated sweep-in and sweep-out system, or ASISO system, is an essential part of liquidity management. The system automates the procedure for overseeing banks' liquidity.

It was implemented in 2020 to address the disruptions brought about by COVID-19. Also to maximize the use of human resources by giving qualified participants more latitude in handling their cash reserve ratio (CRR) balances at the end of the day.

On all real-time gross settlement (RTGS) working days, participants have the ability to set or modify their end-of-day current account balance limits between 9 am and 11.30 pm.

These restrictions can be defined as the maximum and minimum balances (in rupees) associated with MSF (Marginal Standing Facility) operations and the liquidity adjustment facility (LAF).

Effects On EOD (End of Day) Oprations

Everyday operations at banks were disrupted because funds were neither credited nor debited. In addition, there may have been non-compliance with the RBI's liquidity requirements, which could result in penalties since banks were unable to finish their end-of-day operations.

Uncertainty in the financial markets can also result from the non-publication of liquidity statistics.

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