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In anticipation of liquidity tightening due to outflows on account of advance tax, the Reserve Bank of India has decided to extend borrowing facility under the MSF window on Saturday.
“As the liquidity conditions are expected to tighten on account of advance tax payments commencing from mid-December 2013, Reserve Bank has decided to offer funds to the Banks for two days through Marginal Standing Facility (MSF) on Saturday,” RBI said in a statement.
The MSF window will remain open between 5.00 p.m. and 5.30 p.m. and the due date of repayment will be December 16, 2013 (Monday), the statement said.
Currently, the MSF rate is at 8.75 per cent.
On December 11, banks had borrowed Rs 250 crore through the MSF window, while a day later on December 12, the amount borrowed was limited to Rs 50 crore.
Earlier this week, RBI had had decided to provide additional liquidity of Rs 10,000 crore through the 14-day term repo on Friday. In the auction, the RBI notified allotted Rs 48,506 crore from bids amounting to Rs 76,625 crore. The cut off rate was 8.01 per cent.
beena.parmar@thehindu.co.in
Source: thehindubusinessline
“As the liquidity conditions are expected to tighten on account of advance tax payments commencing from mid-December 2013, Reserve Bank has decided to offer funds to the Banks for two days through Marginal Standing Facility (MSF) on Saturday,” RBI said in a statement.
The MSF window will remain open between 5.00 p.m. and 5.30 p.m. and the due date of repayment will be December 16, 2013 (Monday), the statement said.
Currently, the MSF rate is at 8.75 per cent.
On December 11, banks had borrowed Rs 250 crore through the MSF window, while a day later on December 12, the amount borrowed was limited to Rs 50 crore.
Earlier this week, RBI had had decided to provide additional liquidity of Rs 10,000 crore through the 14-day term repo on Friday. In the auction, the RBI notified allotted Rs 48,506 crore from bids amounting to Rs 76,625 crore. The cut off rate was 8.01 per cent.
beena.parmar@thehindu.co.in
Source: thehindubusinessline
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