The Marginal Standing Facility (MSF) is a facility under which scheduled commercial banks can borrow additional funds overnight from the Reserve Bank of India (RBI) by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit. It was introduced as a safety valve against unanticipated liquidity shocks. The rate charged under MSF is a penal rate, typically higher than the prevailing repo rate.
The "Marginal Standing Facility" is a window for banks to borrow funds from the Reserve Bank of India at
Asked in UPSC Combined Section Officer 2021 22 · Topic: Money & Banking (Monetary Policy: Objectives, Instruments (quantitative and qualitative), and Transmission Mechanism)
More Economic Development questions
- The 'Interest Rate Policy' is a component of which one of the following policies ?
- Which one of the following is a qualitative tool of monetary policy ?
- The monetary policy of India is framed by
- In India the Repo rate is announced by
- Which of the following would have inflationary effect on the economy? 1. RBI releasing new bonds in the market 2. RBI decreasing the SLR 3. RBI increasing the Bank Rate 4. Abolition of CRR
- Open-market operations of Reserve Bank of India refer to
- An increase in CRR by the Reserve Bank of India results in
- The interest rate at which the Reserve Bank of India lends to Commercial banks in the short-termto maintain liquidity is known as