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MSF Rate Hiked by 25 bps to 9.00%

Current · Source: Reserve Bank of India · RBI/2013-2014/471 · issued 28 Jan 2014 · ~1 min read
Quick answerRBI raised the Marginal Standing Facility rate by 25 basis points to 9.00%, effective immediately, as part of the Third Quarter Review of Monetary Policy 2013-14. All other MSF scheme terms remain unchanged.
The rule, in the simplest words
How it plays out — a real example

Rohit, a treasury manager at a scheduled commercial bank in Mumbai, looks at the new RBI notice, updates the MSF borrowing cost in his spreadsheet to 9.00%, informs his ALM team that the overnight funding price is higher, and revises the bank's liquidity contingency plan to use cheaper sources before tapping the MSF window.

What changed

The Marginal Standing Facility (MSF) rate was increased by 25 basis points from 8.75% to 9.00% with immediate effect. This change was announced in the Third Quarter Review of the Monetary Policy 2013-14. All other terms and conditions of the MSF scheme remain unchanged.

What it means for you

Banks will now pay a higher rate (9.00%) when borrowing overnight funds from RBI under the MSF window, making this source of liquidity more expensive. This could tighten short-term liquidity management for banks and may lead to a slight upward pressure on lending rates. The move signals RBI's intent to manage inflation and anchor rate expectations.

What you must do

Who it affects

All Scheduled Commercial Banks (excluding RRBs), Treasury departments of banks, Asset-Liability Management (ALM) teams, Banks relying on MSF for short-term liquidity

❓ Common questions

What is the new MSF rate and when does it take effect?

The MSF rate has been increased by 25 basis points to 9.00% with immediate effect from January 28, 2014.

Are there any other changes to the MSF scheme?

No, all other terms and conditions of the current MSF scheme remain unchanged as per the notification.

Why did RBI hike the MSF rate?

The hike was announced as part of the Third Quarter Review of the Monetary Policy 2013-14, likely to manage inflationary pressures and align short-term rates with policy stance.

📜 Read the original circular — full text as issued by RBI
RBI/2013-2014/471 FMD.MOAG. No. 97 /01.18.001/2013-14 January 28, 2014 All Scheduled Commercial Banks (excluding RRBs) Madam / Sir, Marginal Standing Facility As announced today in the Third Quarter Review of the Monetary Policy 2013-14 , it has been decided to increase the Marginal Standing Facility (MSF) rate by 25 basis points from 8.75 percent to 9.00 per cent with immediate effect . 2. All other terms and conditions of the current MSF Scheme will remain unchanged. Yours sincerely (G. Mahalingam) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-2014/471 · issued 28 Jan 2014. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Scheduled Commercial Banks (excluding RRBs), Treasury departments of banks, Asset-Liability Management (ALM) teams, Banks relying on MSF for short-term liquidity), your first concrete step on “MSF Rate Hiked by 25 bps to 9.00%” is: “Update your internal MSF borrowing cost calculations to reflect the new 9.00% rate.” (RBI issued this 28 Jan 2014).

  1. Circular: RBI/2013-2014/471 -- MSF Rate Hiked by 25 bps to 9.00%
  2. Issued: 28 Jan 2014
  3. Action required: Update your internal MSF borrowing cost calculations to reflect the new 9.00% rate.
  4. Action required: Review your liquidity contingency plans to account for the higher cost of MSF funds.
  5. Action required: Communicate the rate change to your treasury and ALM teams for immediate impact assessment.
  6. Action required: Monitor overnight interbank rates for any spillover effects from the MSF hike.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8719&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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