Marginal Standing Facility (MSF) is a scheme announced by the Reserve Bank of India (RBI) in its Monetary Policy and refers to the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window. In which year did this scheme come into effect?

The Marginal Standing Facility was introduced by the Reserve Bank of India in 2011-12 as part of the monetary policy framework. MSF allows scheduled commercial banks to borrow funds from the RBI at a penal rate (usually 1% above the repo rate) against their excess statutory liquidity ratio (SLR) holdings. This provides banks with an additional borrowing window beyond the Liquidity Adjustment Facility (LAF).