BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Funded
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Financial
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Flow
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Facility
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Detailed explanation-1: -The MSF rate is pegged 100 basis points or a percentage point above the repo rate. Under MSF, banks can borrow funds up to one per cent of their net demand and time liabilities (NDTL).
Detailed explanation-2: -MSF Rate. The current MSF rate or Marginal Standing Facility Rate in India is 4.25%. This is the rate at which the banks can pledge government securities for gaining liquidity in situations when the liquidity is dried up.
Detailed explanation-3: -Definition: Marginal standing facility (MSF) is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely.
Detailed explanation-4: -The MSF or Marginal Standing Facility (MSF) Rate is the rate at which RBI lends funds overnight to scheduled banks, against government securities. RBI has introduced this borrowing scheme to regulate short-term asset liability mismatches in a more effective manner.
Detailed explanation-5: -Repo Rate (RR) is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks or financial institutions in India against government securities. The current Repo Rate 2022 is at 4.40%.