The “Marginal Standing Facility” is a window for banks to borrow funds from the Reserve Bank of India at
the repo rate
a rate lower than the repo rate
a rate higher than the repo rate
zero interest rate
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC Combined Section Officer – 2021-22
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.