Marginal Standing Facility

Marginal standing facility is a tool to increase liquidity by borrowing money from RBI. It was introduced in 2011-12 during the monetary policy reform exercise. This borrowing is at an interest rate above the repo rate. This penalty interest rate is called MSF rate. The RBI has decided to extend marginal standing facility to Regional Rural Banks (RRB). Till now, RRBs haven’t been allowed to access liquidity windows of the apex bank.