The Reserve Bank of India (RBI) on Wednesday, December 27, said banks may reverse liquidity facilities under the Standing Deposit Facility (SDF) and the Marginal Standing Facility (MSF) even during weekends and holidays, effective from December 30, 2023.
This development marks a departure from the previous protocol, where access to the SDF and MSF was open on all days, including Sundays and holidays, but the reversal was only permitted on the next working day in Mumbai.
Under the Automated Sweep-In and Sweep-Out (ASISO) facility, SDF/MSF bids will promptly reverse on the next calendar day.
Additionally, for manual bids placed via the e-Kuber portal, eligible entities can exercise the choice of tenor at the time of bidding.
The flexibility to select tenor options will be operational from December 29, 2023 (Friday) for SDF/MSF operations, with the reversal slated to commence from December 30, 2023 (Saturday).
Crucially, this decision holds the promise of reshaping liquidity management strategies within banks. Bankers, acknowledging the impact of this move, highlight its potential to enable increased lending by fostering smoother borrowing transactions between banks.
First Published: Dec 27, 2023 4:38 PM IST
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