Explanation:

• Marginal standing facility (MSF) is the rate at which banks can borrow overnight funds from RBI against the approved government securities.
• It is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely.
• Banks borrow from the central bank by pledging government securities at a rate higher than the repo rate under the liquidity adjustment facility. The MSF rate is pegged 100 basis points or a percentage point above the repo rate.
• Generally, banks are allowed to borrow under MSF within a cap (based on SLR reserves or NDTL). An increase in this cap will open up more avenues for the bank to borrow from the RBI. Hence an increase in the cap for MSF will increase liquidity with banks.

Hence only statements 1&2 are correct.