'Penal rate' is also known as _____________.
'Penal rate' is also known as _____________.
The correct option is C bank rate
Bank Rate is now aligned to Marginal
Standing Facility (MSF) rate, also called the penal rate at which banks
can borrow money from the central bank over and above what is available to them
through the LAF window.
LAF is a facility extended by the
Reserve Bank of India to the scheduled commercial banks (excluding RRBs) and
primary dealers to avail of liquidity in case of requirement or park excess
funds with the RBI in case of excess liquidity on an overnight basis against
the collateral of Government securities including State Government securities.
Basically LAF enables liquidity management on a day to day basis.
Marginal Standing Facility (MSF)
is a new scheme announced by the Reserve Bank of India (RBI) in its Monetary
Policy (2011-12) and refers to the penal rate at which banks can borrow money
from the central bank over and above what is available to them through
the LAF window.
Bank Rate is now aligned to Marginal Standing Facility (MSF) rate, also called the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window.
LAF is a facility extended by the Reserve Bank of India to the scheduled commercial banks (excluding RRBs) and primary dealers to avail of liquidity in case of requirement or park excess funds with the RBI in case of excess liquidity on an overnight basis against the collateral of Government securities including State Government securities. Basically LAF enables liquidity management on a day to day basis.
Marginal Standing Facility (MSF) is a new scheme announced by the Reserve Bank of India (RBI) in its Monetary Policy (2011-12) and refers to the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window.
