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Reversal of liquidity facilities under both SDF and MSF is available with effect from Dec 30: RBI

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The Reserve Bank of India today said that reversal of liquidity facilities under both Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) is available on an overnight basis on all days, including Sundays and holidays, with effect from December 30. However, it has been clarified that the reversal is permitted only on the next working day in Mumbai.
For deploying and using different tools for sucking out liquidity from the system, in case inflation shoots up or remains elevated, RBI Governor Shaktikant Das had announced the SDF and MSF reversal facility will remain open all days. This important announcement was made concerning banks and the liquidity situation.

The RBI said that the SDF/MSF bids triggered under the Automated Sweep-In and Sweep-Out (ASISO) facility will now reverse on the next calendar day. It added that in the case of a manual bid placed through the e-Kuber portal, the choice concerning tenor will be exercisable by the eligible entities at the time of placing of bid. It further said that access to SDF/MSF will continue to be available on all days, including Sundays and holidays.
The Reserve Bank of India is using Standing Deposit Facility (SDF) as an additional tool for absorbing liquidity to control Inflations. The use of this tool (SDF) enables the RBI to take deposits from commercial banks without having to compensate them with government securities.

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