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This question belongs to Banking Awareness Banking Awareness Miscellaneous

Banking Awareness miscellaneous

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RBI on October, 7th 2013, has reduced Marginal Standing Facility (MSF) rate from 9.5% to 9% to improve liquidity in the system. What is MSF?

A) MSF rate is the rate at which banks lodge funds overnight with RBI buying approved government securities. B) MSF rate is the rate at which banks borrow funds overnight from other banks against approved government securities. C) MSF rate is the rate at which banks borrow funds overnight from RBI against approved government securities. D) MSF rate is the minimum rate at which banks lend to the borrowers.

Answer & Solution

Correct Answer: Option C

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