RBI extends MSF facility to provide additional liquidity to banks
To provide comfort to banks on their liquidity requirements, the Reserve Bank of India (RBI) on Friday extended the facility of tapping funds under the marginal standing facility (MSF) for a further period of three months, up to December 31, 2021.
Under MSF banks are allowed to avail funds by dipping into the Statutory Liquidity Ratio (SLR) up to an additional one per cent of net demand and time liabilities (NDTL), i.e., cumulatively up to 3 per cent of NDTL.
"To provide comfort to banks on their liquidity requirements, including meeting their Liquidity Coverage Ratio (LCR) requirement, this relaxation which is currently available till September 30, 2021 is being extended for a further period of three months, i.e., up to December 31, 2021," a RBI statement said.
Through this dispensation, banks will get increased access to funds to the extent of Rs 1.62 lakh crore and qualifies as high quality liquid assets (HQLA) for the LCR.
