To accommodate the requirement owing to the liquidity shortage latest by March 31, 2021, the Reserve Bank of India (RBI) has further increased the limit of enhanced borrowing facility provided to banks by six months. A 2 per cent to 3 per cent increase in terms of net demand and time liability under the marginal standing facility (MSF) scheme was permitted on March 27 when the central bank had increased the borrowing limit for scheduled banks. The facility which was previously available up to June 30 was afterwards extended up to September 30 in the wake of the novel coronavirus pandemic and imposed lockdowns following economic standstills.

 “With a view to providing comfort to banks on their liquidity requirements as also to enable to continue to meet LCR requirements, it has been decided to continue with the MSF relaxation for a further period of six months, that is up to March 31, 2021,” the RBI said in a statement late on Monday.

It added the dispensation giving further fund accessibility up to Rs1.49 lakh crore and also qualifying as high-quality liquid assets for the liquidity coverage ratio.