2020
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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November 30, 2020
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December 30, 2020
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October 30, 2020
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September 30, 2020
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Detailed explanation-1: -MUMBAI : The Reserve Bank of India (RBI) has extended the enhanced borrowing facility provided to banks by six months to meet liquidity shortage till March 31, 2021.
Detailed explanation-2: -MSF is a facility under which scheduled commercial banks can borrow an additional amount of overnight money from the RBI by dipping into their SLR portfolio up to a limit at a penal rate of interest. This provides a safety wall against unanticipated liquidity shocks to the banking system.
Detailed explanation-3: -The SLR was prescribed by Section 24 (2A) of Banking Regulation Act, 1949.
Detailed explanation-4: -If RBI wants to induce liquidity or more funds into the system, it will buy government securities and inject funds, and if it wants to curb the amount of money out there, it will sell these to banks, thereby reducing the amount of cash that banks have.
Detailed explanation-5: -Money can be borrowed from the banks via MSF from the RBI headquarters in Mumbai. They can borrow through this system on all the working days between 3.30 p.m. to 4.30 p.m. excluding Saturday. Through MSF banks can access a minimum amount of Rs. 1 crore.