The Reserve Bank of India vide its notification dated 27th March 2020 has decided to raise the borrowing limit of Scheduled Banks (excluding Regional Rural Bank) under the Marginal Standing Facility scheme from 2 percent to 3 percent of their Net Demand and Time Liabilities (NDTL) outstanding at the end of the second preceding fortnight with immediate effect.
This move intends to provide comfort to the banking system by allowing it to avail an additional 1,37,000 crore of liquidity under the LAF window in times of stress at the reduced MSF rate announced in the MPC’s resolution. The enhanced limit will be applicable up to June 30, 2020.
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