ABC is a scheduled commercial bank and as per balance sheet dated 31.03.2020 showing net demand and time liabilities (NDTL) of ₹ 25,000 crores and investment in the SLR securities at ₹ 5,000 crores. The total NDTL outsta

Reserve Bank of India since May 9, 2011 has allowed an additional facility in the nature of short term Marginal Standing Facility (MSF) for the scheduled commercial banks to borrow funds up to 1% of their Net Demand and Time Liabilities (NDTL) against their SLR securities. Subsequently it was raised to 2% and from 27th March, 2020 it has been raised from Schedule Banks (excluding Regional Rural Banks) under the MSF to 3% up to 30th June, 2020 of their NDTL outstanding at the end of the second preceding fortnight. In terms of RBI notification RBI/2019-20/259 DOR.NO.Ret.BC.77/12.02.2001/2019-20 the same raised borrowing limit is allowed to continue till September 30, 2020. The rate of interest applicable on such advances is fixed at a higher rate than the Repo Rate which as at July 2020 was 4.25% p.a. Accordingly, the ABC Bank which is a scheduled Commercial Bank can take the amount under MSF from RBI for the period from the date of demand in July, 2020 to 30th Sept. 2020 @ 3% of its NDTL. The NDTL outstanding on the 2nd preceding fortnight of July, 2020 as given was of ₹ 27,000 crores equal to 3% thereof works out at ₹ 810 crores which the ABC Bank can take from RBI against its SLR Securities of ₹ 5100 crores. Rate of interest on the amount of 810 cores so taken under this scheme by the ABC Bank shall be charged at 4.25% per annum.