Q. Consider the following statements regarding “Marginal Standing Facility (MSF)”:
1.It was come into effect from 2015.
2.Under this scheme, banks can borrow overnight up-to 1 per cent of their net demand and time liabilities (NDTL) from the RBI.
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation: MSF is a new scheme announced by the RBI in its Monetary Policy, 2011–12 which came into effect from May, 2011.
Under this scheme, banks can borrow overnight up-to 1 per cent of their net demand and time liabilities (NDTL) from the RBI, at the interest rate 1 per cent (100 basis points) higher than the current repo rate.
Source: Ramesh Singh
