If you are looking for the UPSC notes on the standing deposit facility UPSC, you should continue reading this article because you will get all the details here. The UPSC exam preparation is necessary for all the candidates to fetch satisfactory scores on the paper.

Also Read: AFSPA Act UPSC Topic: Take Away These Key Points for UPSC Notes

Standing Deposit Facility – UPSC Topic

# In 2018, the amended Section seventeen of the RbI Act permitted the bank to introduce the SDF – a further tool for gripping liquidity without any collateral.

# By removing the binding collateral constraint on the run, the SDF strengthens the operation framework of financial policy.

# The SDF is a money stability tool additionally to its role in liquidity management.

# The SDF can replace the fixed-rate reverse repo (FRRR) because of the floor of the liquidity adjustment facility passageway.

# Both the standing facilities — the MSF (marginal standing facility) and also the SDF are going to be offered on all days of the week, throughout the year.

Also Read: Microfinance Institutions UPSC: Let’s Have a Deep Understanding of the UPSC Notes!

What is a Standing Deposit Facility & Its Role?

# The primary aim of SDF, the Standing Deposit Facility, is to reduce excess liquidity. This additional liquidity must be of Rs 8.5 lakh crore in the system. The purpose is also inclined toward controlling inflation.

# The SDF rate will be 25 bps below the policy rate (Repo rate), and it will apply to overnight deposits at this stage.

# It would, however, retain the flexibility to absorb liquidity of longer tenors as and when the need arises, with appropriate pricing.

# The RBI plans to restore the size of the liquidity surplus in the system to a level consistent with the prevailing stance of monetary policy.

Importance of SDF

# Liquidity plays an extremely vital part in the transmission of policy rates.

# In a falling rate cycle, pass-through of rate cuts can happen quickly if there’s sufficient liquidity, as banks can lower deposit rates well.

# The reverse holds currently. Excess liquidity has led to short-run market rates slippery below the RBI’s policy repo rate.

# Now, RBI would wish to stay on a decent leash on rates. The RBI would wish its key policy rate i.e., the repo rate, to be the operational rate.

# The management of rates by the Reserve Bank of India has impacted the rates on your deposits and loans.

# The immediate fallout of excess liquidity within the past few months has been the sharp cuts in fund rates.

# If the RBI curbs excess liquidity and halts the autumn in short-run rates, then the depositors will breathe a sigh of relief.

Also Read: Joint Statement Initiative UPSC: Let’s Focus on the UPSC Notes to Excel the UPSC CSE!

UPSC Current Affairs

Focusing on daily, weekly, and monthly current affairs keeps aspirants well prepared regarding the social, economic, and political development across the world. Given below are the opposite key advantages of emphasizing current affairs whereas making ready for the IAS Exam:

# Based on the progress or growth in several fields like environment, ecology, science and technology, art and culture, polity, etc., queries are asked within the UPSC Prelims test. Since this part acts as a qualifier, current affairs will be one of the foremost marking elements of the paper. Also, the comprehension asked within the CSAT paper is mostly based on the newest events or news.

# Having an understanding of not simply the most recent event but additionally its background and history will facilitate candidates to write an additional comprehensive and statistically applicable answer within the UPSC Mains examination. questions asked are largely from the present events that are in news recently.

# The IAS Interview queries may represent the candidate’s opinion of any latest news that considers their elective or specialization subjects. Therefore, to qualify for all 3 stages of the UPSC test, current affairs play a crucial role.

# One of the key responsibilities of an IAS Officer is the implementation and observance of varied state and central schemes and initiatives. By staying updated with the newest current affairs, candidates can acquaint themselves with the govt schemes in India and the way they will be used for the good thing about the folks of the country.

The best way to prepare the current affairs for the UPSC exam is to fetch information from the following areas:

# Daily Newspapers – The Hindu, The Indian Express, etc.

# Summary of Press Information Bureau (PIB) Release

# Yojana Magazine

# Manorama Yearbook

# Weekly and Monthly Current Affairs

# Magazine (for example Pratiyogita Darpan)

# The gist of the Rajya Sabha TV Debate

Important Topics for UPSC Current Affairs 2022

# Vulnerable Witness Deposition Scheme

# Reforms in the Criminal Justice System of India

# Global Risk Report 2022

# Anamalai Tiger Reserve

# Academic Bank of Credit

# National Startup Awards

# India State of Forest Report 2021

# Mysore Dasara

# Imaging XRay Polarimetry Explorer

# National Educational Alliance for Technology

# National Programme for Organic Production

# Fortaleza Declaration

# Guru Ghasidas National Park

# National Security Day

# Henley Passport Index

# Mahaparinirvan Diwas

# World Turtle Day

# Ayushman Bharat Diwas

# Operation Muskaan

# Sahitya Akademi Awards

Also Read: Silverline Project UPSC: Take these Key Points to Make UPSC Notes


Hopefully, this article has proved to be helpful for your UPSC exam preparation. If you are looking for more articles on different current affairs topics, visit the UPSC Pathshala website.

Content Protection by DMCA.com
Standing Deposit Facility UPSC: Check Out What is Standing Deposit Facility & Its Role?
Article Name
Standing Deposit Facility UPSC: Check Out What is Standing Deposit Facility & Its Role?
All the important information related to the standing deposit facility for UPSC is provided in this article along with the answer to what is Standing Deposit Facility & its role?
Publisher Name
UPSC Pathshala
Publisher Logo

About the Author

Shruti Rag

Shruti is a creative and enthusiastic content writer along with being a budding journalist. She is a genuine-hearted and exploring girl with a dash of millennial approach. Her love for speaking and writing has made her pursue her bachelor's in journalism and mass communication. She believes in the quote, "if you will never fail in life, you will never rise like a phoenix from its ashes''. She gives strengthening and positive paths to the students by her content. Her interest lies in reading, traveling, and singing. Innovations and realism let you discover your identity. She has faith in wisdom and determination to touch the skies.

View All Articles