SDF and MSF timings changed by RBI, Check new Timings

The Reserve Bank of India (RBI) has changed SDF and MSF timings. Currently, banks can access the Standing Deposit Facility (SDF) and the Marginal Standing Facility (MSF) between 5:30 PM and 11:59 PM every day.

However, since the market trading hours for call money (short-term borrowing between banks) have now been extended till 7:00 PM, the Reserve Bank of India (RBI) has decided to change the timings for SDF and MSF as well.

New Timings (Effective from July 1, 2025):

• SDF and MSF will now be available from 7:00 PM to 11:59 PM every day.

This change will start from July 1, 2025 and aims to keep these facilities aligned with the updated market timings. Apart from the change in timings, all other rules and conditions related to SDF and MSF will remain the same.

What This Means in Simple Terms

• SDF is a tool used by RBI to absorb excess money from banks without giving any collateral.
• MSF is used by banks to borrow money from RBI in emergencies, but at a slightly higher interest rate.

By adjusting the timings to start at 7:00 PM instead of 5:30 PM, the RBI is making sure that these facilities are more in sync with updated banking and trading hours.

What is Standing Deposit Facility?

The Standing Deposit Facility (SDF) is a tool that allows banks to park their excess funds with the RBI without giving any collateral.

Why it’s used:

It helps the RBI absorb surplus liquidity (extra money) from the banking system. This is especially useful when there is too much cash in circulation, which could lead to inflation.

Key Features:

• No collateral is required.
• The RBI pays interest to banks on the money they deposit.
• It acts as the floor rate of the interest rate corridor.
• Introduced in April 2022 as an alternative to reverse repo.

It is a type of safe locker where banks can keep extra money for short periods and earn a small interest from RBI, helping control excess money in the system.

What is Marginal Standing Facility?

What it is:

The Marginal Standing Facility (MSF) allows banks to borrow money from the RBI overnight, usually in urgent or emergency situations.

Why it’s used:

It helps banks meet unexpected shortfalls in cash when they run out of other options.

Key Features:

• Banks must provide government securities (like bonds) as collateral.
• The interest rate is higher than the repo rate, as it is meant for emergency borrowing.
• It acts as the ceiling rate of the interest rate corridor.
• Introduced in 2011 to provide a safety net for banks.

It is a type of emergency loan option for banks when they face a sudden cash crunch, but at a higher interest cost.

Feature	SDF (Standing Deposit Facility)	MSF (Marginal Standing Facility)
Purpose	Absorb excess money from banks	Lend emergency funds to banks
Collateral Required?	No	Yes (government securities)
Who Benefits?	RBI (controls liquidity) & banks	Banks (get urgent funds)
Interest Rate	Lower (floor rate)	Higher (ceiling rate)
Introduced In	2022	2011