MPC meeting rescheduled & MSF Relaxation extended till 31, March 2021

September 28, 2020 (Mumbai): The meeting of the Monetary Policy Committee (MPC) during September 29, 30 and October 1, 2020 as announced by RBI vide Press Release 2019-2020/2248 dated April 20, 2020 is being rescheduled. The Central Bank communication said that the dates of the MPC’s meeting will be announced shortly.

Marginal Standing Facility (MSF) – Extension of Relaxation

On March 27, 2020 banks were allowed to avail of funds under the marginal standing facility (MSF) by dipping into the Statutory Liquidity Ratio (SLR) by up to an additional one per cent of net demand and time liabilities (NDTL), i.e., cumulatively up to 3 per cent of NDTL. This facility, which was initially available up to June 30, 2020 was extended on June 26, 2020 up to September 30, 2020, in view of disruptions imposed by COVID-19. This dispensation provides increased access to funds to the extent of ₹1.49 lakh crore, and also qualifies as high-quality liquid assets (HQLA) for the Liquidity Coverage ratio (LCR). With a view to providing comfort to banks on their liquidity requirements as also to enable to continue to meet LCR requirements, it has been decided to continue with the MSF relaxation for a further period of six months, i.e., up to March 31, 2021.

Surendra Naik

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Surendra Naik

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