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Q. Consider the following statements in regard to ‘Marginal Standing Facility (MSF)’ of RBI :
1. It will help in reducing volatility in the overnight lending rates in the inter-bank market.
2. The borrowing under the MSF should be over and above the statutory liquidity requirement.
Which of the statements given above is/are correct?

  • (A) 2 only
  • (B) Both 1 and 2
  • (C) 1 only
  • (D) Neither 1 nor 2
  • Correct Answer - Option(C)
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