Finance & Economy | News & Insights

RBI extends enhanced borrowing limit under MSF

Published: June 30, 2020
Author: munimji

Due to the ongoing economic crisis turned out of the coronavirus pandemic the Reserve Bank of India has decided to extent enhance the following facility under Marginal Standing Facility to the bank for meeting the liquidity shortages till September 30. The RBI on a temporary basis has increased the borrowing limit from 2 % to 3% of Net Demand and Time Liabilities.

Under the MSF, banks can borrow overnight funds at their discretion by dipping into the Statutory Liquidity Ratio (SLR). This relaxation, which was granted till June 30, 2020, has now been extended till September 30.

“On a review, it has now been decided to extend this enhanced limit till September 30, 2020,” the Reserve Bank of India (RBI) said in a circular.

The RBI has also extended the relaxation on the minimum daily maintenance of the Cash Reserve Ratio (CRR) at 80 percent for a further period of three months till September 25, 2020.

On March 27, the minimum daily maintenance of the CRR was reduced from 90 percent of the prescribed CRR to 80 percent till June 26, 2020.

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