As on May 2019, the difference between repo rate and MSF is 0.25%. This facility is available to the eligible banks on all the working days except on Saturdays between After discussing much on these two entities, we conclude that any of the options can be availed by the commercial bank when there is a deficiency of funds. This means that the securities held by a bank above 19.0% (SLR as on 15            Now suppose that the bank has pledged all of its securities above 19% to the RBI for getting funds (means no eligible securities). Mai 2011 in Kraft. Eligible securities are first class securities (including government bonds, T Bills, State Development Loans etc) held by a bank over the SLR requirement.

Tenor and Amount: Under the facility, the eligible entities can avail overnight, up to one per cent of their respective Net Demand and Time Liabilities (NDTL) outstanding at the end of the second preceding fortnight.3. Lending at repo rates involve selling of bank’s securities as collateral to RBI along with a repurchase agreement. According to the RBI circular on MSF, “In the event, the banks’ SLR holdings fall below the statutory requirement up to one per cent of their NDTL, banks will not have the obligation to seek a specific waiver for default in SLR compliance arising out of use of this facility”. While, the MSF is meant for lending overnight to banks. The Bank Rate and Repo Rate are two kinds of interest rates applied at the time of advances to the banks or other financial institutions. What is CRR? Following are the main features of the MSF. Both the MSF rate and Bank rate are equal. The major difference between the Bank rate and MSF Rate is that at Bank rate the loan is not given by pledging securities, but in MSF, the loan is given by pledging the government approved securities (specified criteria). The following is a collection of the most used terms in this article on This site is owned and operated by Indragni Solutions.“We help people find the difference between various terms in the categories: Business, Finance, Banking, Computers, IT, Entertainment, Science, Education, English and Law“Difference Between Bank Rate and MSF Rate (With Table)Difference Between Merchant Bank and Development Bank (With Table) We already explained the difference between Bank Rate and the Repo rate. Usually, when banks need short term loans from the RBI, they pledge their security holdings that is above the SLR holdings with the RBI to get one day loans under repo. Difference between the bank rate and the MSF rate. Under repo, loans are provided for just one day and banks should pledge their security holding that is held above the SLR (Statutory Liquidity Ratio) level to get one day loans. Timing: The Facility will be available on all working days in Mumbai, excluding Saturdays.4. It is quite a short period to provide funds, hence the charge is more for the MSF rate.MSF (Marginal Standing Facility) was established on 9th May 2011.MSF (Marginal Standing Facility) was come into existence by RBI (Reserve Bank of India). Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the needs of securing the monetary stability in the country, RBI can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. But as per the MSF, the bank can borrow 1 % of its liabilities from the RBI.

Bank Rate Another name used for bank rate by the financial institutions is a discount rate. Es ist nicht dasselbe wie MSF Rate. Under MSF, Scheduled Commercial Banks can borrow money from RBI @1% higher than the ongoing Repo rate under liquidity adjustment facility (LAF.) Whenever the commercial bank lacks in funds of finance, can borrow the loan from the apex bank i.e.

Repo Rate is the rate at which the money is lent by Reserve Bank of India to commercial bank on the other hand MSF is a rate at which RBI lends money only to scheduled banks.
Under MSF, a bank can borrow one-day loans form the RBI, even if it doesn’t have any eligible securities excess of its SLR requirement (maintains only the SLR). In the case MSF, banks can borrow funds up to one percentage of their NDTL, at a rate of one percentage higher than the repo rate. = SBI sells Government security to RBI, and promises to buy it back after sometime, at a higher rate. Base Rate: On the contrary, MSF (Marginal Standing Facility) rate is a rate on which the central bank issues money overnight to It is applicable only for a very short period and the banks can borrow just one percent of their entire demand.The higher bank rate helps in restoring the inflation whereas the lower bank rate helps in expanding the economy.
Difference between the Repo rate and the MSF rate can be changed in accordance with the policy perspective of the RBI.