**Summary:**
This notification, RBI/2017-2018/184 FMOD.MAOG.No.12401/18.001/2017-18, issued by the Reserve Bank of India (RBI) on June 6, 2018, announces a change to the Marginal Standing Facility (MSF) rate. As a result of the Monetary Policy Committee's (MPC) decision in the Second Bi-monthly Monetary Policy Statement, 2018-19, the policy Repo rate under the Liquidity Adjustment Facility (LAF) has been increased by 25 basis points, from 6.0 percent to 6.25 percent, effective immediately. Consequently, the MSF rate is adjusted to 6.50 percent, also effective immediately. All other terms and conditions of the existing MSF scheme remain unchanged. The notification is addressed to all Scheduled Commercial Banks, excluding Regional Rural Banks (RRBs). For further information, contact Radha Shyam Ratho, Chief General Manager, Financial Markets Operation Department, Central Office, at cgmfmod@rbi.org.in, or by phone at 22610642, or by fax at 22630981. The Central Office is located at 1st Floor, Main Building, Shahid Bhagat Singh Road, Fort, Mumbai-400 001, India.
Key Entities Referenced
Marginal Standing Facility (MSF): A facility under which scheduled commercial banks can borrow additional funds overnight from the Reserve Bank of India (RBI) at a rate linked to the policy repo rate.
Monetary Policy Committee (MPC): A committee of the Reserve Bank of India (RBI) responsible for setting the policy interest rates to achieve the inflation target.
Repo rate: The interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks against the collateral of government securities.
Liquidity Adjustment Facility (LAF): A tool used by the Reserve Bank of India (RBI) to manage liquidity in the banking system through repo and reverse repo operations.
Reserve Bank of India (RBI): The central bank of India, responsible for regulating the banking system and controlling monetary policy.
Radha Shyam Ratho: Chief General Manager, Financial Markets Operation Department, Reserve Bank of India (RBI).
Mumbai, Maharashtra: Location of Central Office, Financial Markets Operation Department, Reserve Bank of India (RBI).
Scheduled Commercial Banks: Banks in India that are listed in the Second Schedule to the Reserve Bank of India Act, 1934.
RBI/2017-2018/184
FMOD.MAOG.No.124/01.18.001/2017-18
June 6, 2018
All Scheduled Commercial Banks (excluding RRBs)
Madam/Sir,
Marginal Standing Facility
As announced in the Second Bi-monthly Monetary Policy Statement, 2018-19, today, it
has been decided by the Monetary Policy Committee (MPC) to increase the policy Repo
rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.0 per cent to
6.25 per cent with immediate effect.
2. Consequent to the change in the Repo rate, the Marginal Standing Facility (MSF) rate
stands adjusted to 6.50 per cent with immediate effect.
3. All other terms and conditions of the extant MSF scheme will remain unchanged.
Yours sincerely
(Radha Shyam Ratho)
Chief General Manager
Financial Markets Operation Department, Central Office, 1st Floor, Ma in Building, Shahid Bhagat Singh Road, Fort, Mumbai-400 001, India
Tel : 22610642 Fax No:22630981 E-Mail : cgmfmod@rbi.org.in