RBI has extended the timeline of the enhanced borrowing facility provided to scheduled banks under the marginal standing facility (MSF) scheme to meet their liquidity shortages till September 2020. What is the new borrowing limit?
Answer with explanationAnswer: Option D
The Reserve Bank of India had increased the borrowing limit of scheduled banks under the marginal standing facility (MSF) scheme from 2 percent to 3 percent of their Net Demand and Time Liabilities (NDTL) as a temporary measure to deal with cash crunch caused by coronavirus pandemic. This relaxation was effective from March 27, 2020, and was granted till June 30, 2020. Now, RBI has decided to extend this enhanced borrowing facility provided to the banks to meet their liquidity shortages till September 30, 2020.
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