Marginal Standing Facility

History     9th December 2023     Save    
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  • Introduced in 2011, under LAF, banks borrow from the central bank in an emergency situation.
  • So, it is a penal rate because MSF rate is generally pegged above the repo rate.

Repo rate: The rate of interest RBI charges from banks on their short term borrowing.

  • Under MSF, banks can borrow funds up to 1% of their NDTL.
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