MSF rate is the rate at which banks borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities.
This came into effect in may 2011. Under the Marginal Standing Facility (MSF), currently banks avail funds from the RBI on overnight basis against their excess statutory liquidity ratio (SLR) holdings.
Under the facility, the eligible entities can avail overnight, up to one per cent of their respective Net Demand and Time Liabilities (NDTL) outstanding at the end of the second preceding fortnight.
Rate of Interest: The rate of interest on amount availed under this facility will be 100 basis points above the LAF repo rate, or as decided by the Reserve Bank from time to time.
Timing: The Facility will be available on all working days in Mumbai, excluding Saturdays between 3.30 P.M. and 4.30 P.M.
Minimum request size: Requests will be received for a minimum amount of Rs. One crore and in multiples of Rs. One crore thereafter.
Current MSF rate: In the mid-quarter review of the monetary policy , the Reserve Bank of India (RBI) increased the Marginal Standing Facility (MSF) rate by 25 basis points to 9.00% and increased the Repo rate by 25 basis points to 8.00% with immediate effect.
Requirement: It is required because Commercial banks borrow money from RBI at MSF rate when there is an acute cash shortage or acute asset-liability mismatch.
This came into effect in may 2011. Under the Marginal Standing Facility (MSF), currently banks avail funds from the RBI on overnight basis against their excess statutory liquidity ratio (SLR) holdings.
Under the facility, the eligible entities can avail overnight, up to one per cent of their respective Net Demand and Time Liabilities (NDTL) outstanding at the end of the second preceding fortnight.
Rate of Interest: The rate of interest on amount availed under this facility will be 100 basis points above the LAF repo rate, or as decided by the Reserve Bank from time to time.
Timing: The Facility will be available on all working days in Mumbai, excluding Saturdays between 3.30 P.M. and 4.30 P.M.
Minimum request size: Requests will be received for a minimum amount of Rs. One crore and in multiples of Rs. One crore thereafter.
Current MSF rate: In the mid-quarter review of the monetary policy , the Reserve Bank of India (RBI) increased the Marginal Standing Facility (MSF) rate by 25 basis points to 9.00% and increased the Repo rate by 25 basis points to 8.00% with immediate effect.
Requirement: It is required because Commercial banks borrow money from RBI at MSF rate when there is an acute cash shortage or acute asset-liability mismatch.
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