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SDF Parking Hits Record Rs 4.52 Lakh Crore Amid Surplus Liquidity

11 February 20261 min read
BANKING & FINANCESDF Parking HitsRecord Rs 4.52Lakh Crore AmidSurplus Liquidity11 February 2026safalsetu.com

Why in the news

Surplus liquidity pushed banks’ SDF placements to an all-time high.

LAF corridor

RateLevel
MSF (ceiling)5.50%
Repo (policy)5.25%
SDF (floor)5%, 25 bps below repo

Why SDF exists

  • Soaks up excess liquidity without relying on reverse repo, which needs collateral.
  • Improves policy transmission and firms up the floor for money market rates.

About SDF

  • A liquidity absorption tool, introduced by RBI in April 2022, letting banks park surplus funds with no collateral.

Exam angle

  • SDF = liquidity absorption tool.

Test yourself

1. What is the SDF rate in the current LAF corridor, as stated in the notes?

SDF is the floor at 5%, 25 bps below the 5.25% repo rate.

2. Which feature distinguishes RBI's Standing Deposit Facility from reverse repo?

SDF lets banks park surplus funds without collateral, unlike reverse repo.

3. In the LAF corridor, which rate acts as the ceiling?

MSF at 5.50% is the ceiling; SDF is the floor.

This topic is part of Daily Current Affairs 11 February 2026 (15 topics).

All topics of the dayDay quizFebruary 2026

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