RBI allows reversal of liquidity facilities even during weekends from Dec 30

The central bank added that access to SDF or MSF will continue to be available on all days, including Sundays and holidays

The Reserve Bank of India (RBI) on December 27 said that it has decided to allow reversal of liquidity facilities under both Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) even during weekends and holidays with effect from December 30.

This was proposed by the central bank in the December monetary policy to address the high utilisation of both MSF and SDF by the banks.

Under the SDF, the eligible entities can place deposits with the RBI on an overnight basis. While, MSF allows banks to borrow additional funds from RBI.

The SDF/MSF bids triggered under the Automated Sweep-In and Sweep-Out (ASISO) facility will now reverse on the next calendar day, a release from the central bank said.

In the case of a manual bid placed through the e-Kuber portal, the choice of tenor will be exercisable by the eligible entities at the time of placing of bid, the RBI said in a release.

The central bank added that access to SDF or MSF will continue to be available on all days, including Sundays and holidays.

Banks will get the flexibility to choose tenor from December 29 for SDF or MSF operations and reversal will start taking place from December 30.

Since the liquidity in the banking system started tightening, the utilisation of SDF and MSF by the banks has increased.

On December 26, banks borrowed Rs 1.27 lakh crore from MSF and parked Rs 49,110 crore in SDF.