<h1>Special Liquidity Facility for Mutual Funds provides on tap repo funding to banks for on lending and purchases to ease MF liquidity.</h1> The Reserve Bank opened an on tap Special Liquidity Facility for Mutual Funds allowing banks to obtain repo funding at the fixed policy rate to on lend to mutual funds or to purchase/repo against investment grade corporate bonds, commercial paper, debentures and certificates of deposit held by mutual funds. Funding under the facility may be classified in the held to maturity portfolio beyond normal limits, is excluded from the Large Exposure Framework, does not count toward adjusted non food bank credit for HTM securities, and is exempt from banks' capital market exposure limits; operational terms align with LAF norms including eligible collateral, haircuts, bid mechanics and security substitution.