MUMBAI : In a pre-policy meeting with the Reserve Bank of India (RBI) governor Shaktikanta Das on Saturday, economists have recommended the abolition of reverse repo window and replacing it with the Standing Deposit Facility (SDF) for liquidity management, according to an economist who attended the meeting.
SDF is a liquidity management tool based on which banks can park as much money with the central bank without getting collateral and at a lower rate than reverse repo.
The concept was first proposed by the Urijit Patel Committee six years ago. The monetary policy committee is expected to meet between June 3-5, 2020, and the RBI should be announcing its second bi-monthly policy of 2020-21 on June 5.