Additional Rs 1,37,000 crore of liquidity available under MSF
Under the marginal standing facility (MSF), banks can borrow overnight at their discretion by dipping up to 2% into the Statutory Liquidity Ratio (SLR).In view of the exceptionally high volatility in domestic financial markets which bring in phases of liquidity stress and to provide comfort to the banking system, the RBI has decided to increase the limit of 2% to 3% with immediate effect.
This measure will be applicable up to 30 June 2020. This is intended to provide comfort to the banking system by allowing it to avail an additional Rs 1,37,000 crore of liquidity under the LAF window in times of stress at the reduced MSF rate announced in the MPC's resolution.
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