Marginal Standing Facility (MSF)

The marginal standing facility lets banks borrow overnight from the RBI at a rate above the repo rate when they are short of cash, pledging government securities. Because it is more expensive, banks use it only when other sources dry up.

Why It Matters

If banks are borrowing heavily through the MSF, it usually means cash in the system is unusually tight.

In India

In October 2026 the MSF rate rose to 5.75%, 25 basis points above the new repo rate of 5.50%.