Which among the following defines Marginal Standing Facility Rate ........

Economics- Phase (I & II) Monetary and Fiscal Policy

Which among the following defines Marginal Standing Facility Rate?

The rate at which banks place their surplus funds with the RBI

The rate at which banks can borrow against their excess SLR securities to meet additional liquidity requirements

The rate at which the Reserve Bank is prepared to buy or re-discount bills of exchange or other commercial paper eligible for purchase

The rate at which banks borrow funds from the Reserve Bank against eligible collaterals

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Explanation:

To meet additional liquidity requirements, banks can borrow overnight funds from the Reserve Bank under the Marginal Standing Facility (MSF) at a higher rate of interest. Banks can borrow against their excess SLR securities and are also permitted to dip down up to two percentage points below the prescribed SLR to avail funds under the MSF