Date: 2021-02-05Category: Not ApplicableState: Union GovernmentCountry: India
Section 24 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR) – Marginal Standing Facility (MSF) - Extension of Relaxation
**Summary:**
This Reserve Bank of India (RBI) circular (DOR.No.Ret.BC.36/12.01.001/2020-21) dated February 5, 2021, addresses all scheduled banks regarding an extension of the relaxation concerning the Marginal Standing Facility (MSF) and its relation to the Statutory Liquidity Ratio (SLR). The circular refers to previous directives (DOR.No.Ret.BC.52/12.01.001/2019-20 dated March 27, 2020, DOR.RRB.No.2831/01.001/2020-21 dated December 4, 2020, and Press Release No.2020-2021/401 dated September 28, 2020) that initially allowed banks to access funds under the MSF by dipping into their SLR by up to an additional one percent of their Net Demand and Time Liabilities (NDTL), cumulatively up to three percent of NDTL. This facility, initially available until June 30, 2020, was extended to March 31, 2021. Based on the Statement of Developmental and Regulatory Policies of February 5, 2021, the RBI has decided to extend this MSF relaxation for an additional six months, up to September 30, 2021, to provide continued comfort to banks regarding their liquidity requirements and to enable them to meet their Liquidity Coverage Ratio (LCR) requirements. Contact person for inquiries is Thomas Mathew, Chief General Manager, Department of Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Fort, Mumbai 400001. Telephone number: 22661602/22601006 and Fax No.: 022-22705691. The official website of RBI is www.rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India and the publisher of the policy document.
Banking Regulation Act, 1949: An act related to the regulation of banking companies in India.
Statutory Liquidity Ratio (SLR): The minimum percentage of deposits that commercial banks have to maintain in liquid form.
Marginal Standing Facility (MSF): A facility under which scheduled commercial banks can borrow funds overnight from the Reserve Bank of India.
Net Demand and Time Liabilities (NDTL): The difference between the sum of demand and time liabilities of a bank and its interbank assets.
Liquidity Coverage Ratio (LCR): The ratio of highly liquid assets to net cash outflows over a 30-day period.
Mumbai, Maharashtra: City in India, where the central office of Department of Regulation, Reserve Bank of India is located.
Thomas Mathew: Chief General Manager at Reserve Bank of India.
भारतीय �रज़व र् बक�
______________________RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2020-21/91
DOR.No.Ret.BC.36/12.01.001/2020-21 February 05, 2021
All Scheduled Banks
Dear Sir / Madam
Section 24 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity
Ratio (SLR) – Marginal Standing Facility (MSF) - Extension of Relaxation
Please refer to our circulars DOR.No.Ret.BC.52/12.01.001/2019-20 dated March 27, 2020,
DOR.RRB.No.28/31.01.001/2020-21 dated December 4, 2020 and Press Release No.2020-
2021/401 dated September 28, 2020 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 March 31, 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 of Developmental and Regulatory Policies of February 05,
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 six months, i.e., up to
September 30, 2021.
Yours faithfully
(Thomas Mathew)
Chief General Manager
िविनयमन िवभाग, क�द्रीय काया�लय, 5वी ं मंिजल, अमर भवन, सर पी एम रोड, फोट�, मुंबई 400001
___________________________________________________________________________________________________________________
टेलीफ़ोन /Tel No: 22661602/2260100 फै� / Fax No.: 022-22705691
Department of Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Fort, Mumbai – 400001.
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