One of the most important features of the global financial crisis was the aggravation of the problem of bank liquidity, credit market crisis, and to put it simply, the lack of money. This was addressed through various measures undertaken by the central banks to widen access to central bank financing.
Objective of the refinance facility by central bank is to provide further comfort on liquidity and to impart flexibility in liquidity management to banks. Refinancing operations were undertaken by most of the central banks to ensure credit flow to the real economy. Some central banks undertook specific measures to ensure smooth flow of credit to exporters, small businesses and entrepreneurs. 18.