Marginal Standing Facility (MSF) Rate

Marginal Standing Facility (MSF) Rate

December 15, 2018
6.75%
   0.25% on Aug 01, 2018
1 Yr ago 5 Yr ago 7 Yr ago
6.25% 8.75% 9.50%

Major Monetary Policy Rates And Reserve Requirements

Index
Rate    
Effective Date
6.50%
Aug 01, 2018
6.25%
Aug 01, 2018
6.75%
Aug 01, 2018
4.00%
Feb 09, 2013
19.50%
Oct 14, 2017
(Source: RBI)

Chart of Marginal Standing Facility (MSF) Rate

Select Range:
Source: Reserve Bank of India

Current MSF Rate

The current Marginal Standing Facility (MSF) Rate is 6.75%

. The Marginal Standing Facility (MSF) Rate last witnessed a change in its level on August 01, 2018 when it rose by 0.25% from its previous level of 6.50%.

As of today, i.e. on December 15, 2018, the Policy Rates which include Repo Rate stood at 6.50%, Reverse Repo Rate at 6.25%, Marginal Standing Facility (MSF) Rate at 6.75% and Bank Rate at 6.75%. The Reserve Ratios which include Cash Reserve Ratio (CRR) stood at 4.00% and the Statutory Liquidity Ratio (SLR) at 19.50%, according to data of Major Monetary Policy Rates and Reserve Requirements released by the Reserve Bank of India.


Marginal Standing Facility (MSF) Rate Comparision Chart

Marginal Standing Facility (MSF) Rate Vs
Marginal Standing Facility (MSF) Rate Comparision Chart
Select Range:
Source: Reserve Bank of India

Marginal Standing Facility (MSF) Rate

Marginal Standing Facility (MSF) was announced by the RBI in the Monetary Policy for the year 2011-12. This facility is effective from May 9, 2011.

Under this facility, the eligible entities may borrow up to two per cent of their respective Net Demand and Time Liabilities (NDTL). In the event, the banks’ SLR holding falls below the statutory requirement up to two per cent of their NDTL, banks will not have the obligation to seek a specific waiver for default in SLR compliance arising out of use of this facility.

The MSF facility is for one day except on Fridays when the facility is for three days or more, maturing on the following working day.

Eligibility

All Scheduled Commercial Banks having Current Account and SGL Account with Reserve Bank, Mumbai are eligible to participate in the MSF Scheme.

Rate of Interest

During inception, i.e. in May 2011 it was decided by RBI that the rate of interest on amount availed under this facility will be 100 basis points above the LAF repo rate, or as decided by the Reserve Bank from time to time. In April 2016, RBI narrowed the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps, thus MSF was fixed at 50 basis points above repo rate. In April 2017, RBI again narrowed the LAF corridor from +/-50 basis points (bps) to +/- 25 bps, since then marginal standing facility (MSF) rate is fixed 25 basis points above repo rate.

Eligible Securities

MSF is undertaken in all SLR-eligible transferable Government of India (GoI) dated Securities/Treasury Bills and State Development Loans (SDL). Oil Bonds issued by Government of India also qualify as eligible securities for Marginal Standing Facility (MSF).

Pricing of all securities including Treasury Bills is taken at face value for MSF operations by Reserve Bank. Accrued interest as on the date of transaction is ignored for the purpose of pricing of securities.

Margin Requirement

A margin of 5 per cent is applied in respect of GoI dated securities and Treasury Bills. In respect of SDLs, a margin of 10 per cent is applied by the RBI. Thus, the amount of securities offered on acceptance of a request for Rs.100 is Rs.105 (face value) of GoI dated securities and Treasury Bills or Rs.110 (face value) of SDLs.

Mechanics of operations

The MSF requests is submitted by the SCBs to RBI electronically in the Negotiated Dealing System (NDS). On acceptance of MSF requests, the applicant’s Repo Constituents’ Subsidiary General Ledger Account (RC SGL) is debited by the required quantum of securities and credited to Bank’s RC SGL Account. Accordingly, the applicant’s current account is credited with the MSF application amount. The transactions is reversed in the second leg. In case the second leg falls on a holiday, the reversal date is the next working day.

RBI introduced Straight Through Processing (STP) MSF operations with effect from August 3, 2015. This enables eligible participants to receive the credit or debit immediately on placement of the bids or offers, subject to the availability of the collateral or funds, within the prescribed time window.

Eligible participants can, as hitherto, place multiple bids/offers in the respective liquidity facilities. Settlement of the transaction is automatic and immediate after the placement of the bid/offer. The transactions undertaken by a participant is final and hence request for cancellation of bids or offers is not entertained.

Timing

Marginal Standing Facility (MSF) is available on all working days in Mumbai, excluding Saturdays between 5.30 P.M. and 7.30 P.M.

Minimum request size

MSF requests have to be received by RBI for a minimum amount of Rs. One crore and in multiples of Rs. One crore thereafter.

Settlement of Transactions

The settlement of all applications received under the MSF Scheme takes place on the same day after the closure of the window for acceptance of applications.

  • The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.

  • ~ Bernie Sanders


External Links

Advertisment
Advertisment

Marginal Standing Facility (MSF) Rate
Historical Rate

Select Date

Marginal Standing Facility (MSF) Rate

%

DATE RATE   CHANGE
Aug 01, 2018 6.75% 0.25%
Jun 06, 2018 6.50% 0.25%
Aug 02, 2017 6.25% 0.25%
Apr 06, 2017 6.50% 0.25%
Oct 04, 2016 6.75% 0.25%
Apr 05, 2016 7.00% 0.75%
Sep 29, 2015 7.75% 0.50%
Jun 02, 2015 8.25% 0.25%
Mar 04, 2015 8.50% 0.25%
Jan 15, 2015 8.75% 0.25%
Jan 28, 2014 9.00% 0.25%
Oct 29, 2013 8.75% 0.25%
Oct 07, 2013 9.00% 0.50%
Sep 20, 2013 9.50% 0.75%
Jul 15, 2013 10.25% 2.00%
May 03, 2013 8.25% 0.25%
Mar 19, 2013 8.50% 0.25%
Jan 29, 2013 8.75% 0.25%
Apr 17, 2012 9.00% 0.50%
Oct 25, 2011 9.50% 0.25%
Sep 16, 2011 9.25% 0.25%
Jul 26, 2011 9.00% 0.50%
Jun 16, 2011 8.50% 0.25%

Tax on Petrol

Did you know?

You pay Rs. 34.25 as Tax when you buy one litre of Petrol i.e. Tax on Petrol is 81.0%.

EXPLORE