RBI extends MSF facility for banks until March next year
MSF allows banks to avail of liquidity by up to one percent of their NDTL.
September 28, 2020 / 07:58 PM IST
The Reserve Bank of India (RBI) on September 28 said it has extended the marginal standing facility (MSF) relaxation for banks until March 31. Earlier, this facility was given till September 30.
Under MSF facility, banks are allowed to avail of funds by dipping into the Statutory Liquidity Ratio (SLR) by up to an additional one percent of net demand and time liabilities (NDTL), i.e., cumulatively up to 3 percent of NDTL.
This facility, which was initially available up to June 30, 2020, was extended on June 26, 2020, up to September 30, 2020, in view of disruptions imposed by COVID-19.
This dispensation provides increased access to funds to the extent of Rs 1.49 lakh crore, and also qualifies as high-quality liquid assets (HQLA) for the Liquidity Coverage Ratio (LCR).
“With a view to providing comfort to banks on their liquidity requirements as also to enable to continue to meet LCR requirements, it has been decided to continue with the MSF relaxation for a further period of six months, i.e., up to March 31, 2021,” the RBI said.