2014
Q.
Set A
Economy
Banking
The terms 'Marginal Standing Facility Rate' and 'Net Demand and Time Liabilities', sometimes appearing in news, are used in relation to
Smart Elimination
Here the key term highlights are rate, liability etc which is obviously banking terms.
Answer Key & Explanation
Answer: AThe correct answer is Option A.
Explanation: These terms are core banking concepts:
- Marginal Standing Facility (MSF) Rate: The rate at which banks can borrow overnight funds from the RBI against government securities (above the SLR limit).
- Net Demand and Time Liabilities (NDTL): The sum of a bank's demand deposits (Savings/Current) and time deposits (FD/RD), minus deposits with other banks. It is the base on which CRR and SLR are calculated.
Value Addition
- Policy Corridor: The gap between the MSF rate (Upper bound) and the SDF/Reverse Repo rate (Lower bound).
- MSF: Introduced in 2011.
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Questions
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Difficulty Assessment
easy
Foundational question based on core concepts.