Section 24 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR) – Marginal Standing Facility (MSF) - Extension of Relaxation

Last updated: 11 August 2021

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The Reserve Bank of India (RBI) has extended the relaxation on the Marginal Standing Facility (MSF) for scheduled banks. This allows banks to continue dipping into their Statutory Liquidity Ratio (SLR) by an additional one per cent of their net demand and time liabilities (NDTL). This facility, originally set to expire on September 30, 2021, has now been extended for a further three months, until December 31, 2021. The extension aims to provide continued comfort to banks regarding their liquidity requirements and help them meet their Liquidity Coverage Ratio (LCR) obligations.

RBI/2021-22/82
DOR.RET.REC.36/12.01.001/2021-22

August 09, 2021

All Scheduled Banks

Madam/Sir

Section 24 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity
Ratio (SLR) – Marginal Standing Facility (MSF) - Extension of Relaxation

Please refer to circular DOR.No.Ret.BC.36/12.01.001/2020-21 dated February 05, 2021, on Marginal Standing Facility (MSF), wherein the banks were allowed to avail of funds under the MSF by dipping into the Statutory Liquidity Ratio (SLR) up to an additional one per cent of their net demand and time liabilities (NDTL), i.e., cumulatively up to three per cent of NDTL. This facility, which was initially available up to June 30, 2020, was later extended in phases up to September 30, 2021, providing comfort to banks on their liquidity requirements and also to enable them to meet their Liquidity Coverage Ratio (LCR) requirements.

2. As announced in the Statement on Developmental and Regulatory Policies of August 06, 2021, with a view to providing comfort to banks on their liquidity requirements, banks are allowed to continue with the MSF relaxation for a further period of three months, i.e., up to December 31, 2021.

Yours faithfully

(Thomas Mathew)
Chief General Manager

FAQ :

The MSF relaxation allows banks to avail funds by dipping into their Statutory Liquidity Ratio (SLR) up to an additional one per cent of their net demand and time liabilities (NDTL), making a cumulative three per cent available.

All scheduled banks are eligible to avail of this MSF relaxation.

The MSF relaxation has been extended until December 31, 2021.

The extension is intended to provide comfort to banks regarding their liquidity requirements and to enable them to meet their Liquidity Coverage Ratio (LCR) requirements.

The facility was previously extended up to September 30, 2021.

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Notification No : RBI/2021-22/82 DOR.RET.REC.36/12.01.001/2021-22
Published in Community & General
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12142&Mode=0

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