GENERAL KNOWLEDGE

GK

BANKING AWARENESS AND SEBI

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

On which rate bases, overnight money is needed by bank from RBI?

A	MSF
B	Bank rate
C	Repo rate
D	Reverse repo

Explanation:

Detailed explanation-1: -A marginal standing facility (MSF) was instituted under which banks could borrow overnight at their discretion by dipping up to 1 per cent into the statutory liquidity ratio (SLR) at 100 basis points (bps) above the repo rate to provide a safety valve against unanticipated liquidity shocks (Patra et.

Detailed explanation-2: -What is MSF rate India? Currently, the MSF rate of borrowing is 6.25% p.a. which is 25 basis points or 0.25% higher than the Repo rate. Kickstart your UPSC 2023 preparation today!

Detailed explanation-3: -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%.

Detailed explanation-4: -The correct answer is Marginal Standing Facility Rate. Marginal Standing Facility (MSF) rate is the rate at which the scheduled banks borrow funds overnight from RBI against the Government securities.

There is 1 question to complete.