UPSC General Studies Solved Paper - General Studies-2014

  • question_answer
    The terms 'Marginal Standing Facility Rate' and 'Net Demand and Time Liabilities', sometimes appearing in news, are used in relation to

    A)  banking operations,

    B)  communication networking.

    C)  military strategies.

    D)  supply and demand of agricultural products.

    Correct Answer: A

    Solution :

    Exp. [a] MSF is the rate at which banks can borrow overnight from RBI. This was introduced in the monetary policy of RBI for the year 2011-2012. The MSF is pegged 100 bps or 1 % above the repo rate. Banks can borrow funds through MSF when there is a considerable shortfall of liquidity.

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