RBI Extends Enhanced Borrowing Limit Under MSF Till September 30
- Amid the economic woes created by the Coronavirus pandemic, the Reserve Bank of India (RBI) has decided to extend the enhanced borrowing facility provided to the banks to meet their liquidity shortages till September 30.
- The RBI, as a temporary measure, had increased the borrowing limit of scheduled banks under the marginal standing facility (MSF) scheme from 2 per cent to 3 per cent of their Net Demand and Time Liabilities (NDTL) with effect from March 27, 2020.
- Under the MSF, banks can borrow overnight funds at their discretion by dipping into the Statutory Liquidity Ratio (SLR).
- This relaxation, which was granted till June 30, 2020, has now been extended till September 30. RBI, in its circular said that banks may continue to access overnight funds under the MSF against their excess SLR holding.
- The marginal standing facility rate currently stands at 4.25 per cent. The RBI has also extended the relaxation on the minimum daily maintenance of the Cash Reserve Ratio (CRR) at 80 per cent for a further period of three months till September 25, 2020.
- On March 27, the minimum daily maintenance of the CRR was reduced from 90 per cent of the prescribed CRR to 80 per cent till June 26, 2020. This was done in view of the continuing of hardships faced by banks in terms of social distancing of staff and consequent strains on reporting requirements.
The Reserve Bank of India (RBI) is India’s central bank, which controls the issue and supply of the Indian rupee. RBI is the regulator of the entire Banking in India. RBI plays an important part in the Development Strategy of the Government of India.RBI regulates commercial banks and non-banking finance companies working in India. It serves as the leader of the banking system and the money market. It regulates money supply and credit in the country.
- Headquarters– Mumbai, Maharashtra
- Formation– 1 April 1935
- Deputy Governors– 4 (Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra, one is yet to be appointed)