The terms āMarginal Standing Facility Rateā and āNet Demand and Time Liabilitiesā, sometimes appearing in news, are used in relation to
[amp_mcq option1=ābanking operationsā option2=ācommunication networkingā option3=āmilitary strategiesā option4=āsupply and demand of agricultural productsā correct=āoption1ā³]
This question was previously asked in
UPSC IAS ā 2014
The correct option is A. The terms āMarginal Standing Facility Rateā and āNet Demand and Time Liabilitiesā are used in relation to banking operations.
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 certain limit. The MSF Rate is the interest rate charged by the RBI for this facility, and it is a key monetary policy tool. Net Demand and Time Liabilities (NDTL) represent the total liabilities of a bank (deposits, borrowings, etc.) minus its deposits with other banks and other approved assets. It is the base on which banksā reserve requirements like the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are calculated by the RBI.