Standing Deposit Facility

On 9th April 2025, Reserve Bank of India (RBI) Governor while announcing the monetary policy expressed concern that banks, instead of lending funds in the uncollateralised call money market, are parking it in the standing deposit facility (SDF).

What is SDF?

  • The SDF is a tool to absorb liquidity (deposits) from commercial banks without giving government securities to them in return.
  • It is different from the reverse repo facility in that it does not require banks to provide collateral while parking funds.
  • It was introduced on April 8, 2022.
  • In January 2014, the 'Expert Committee to ....
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