Market Stabilization Bond

  • MSS bonds bear an interest rate that can boost banks’ income. This incentivizes banks to participate effectively in demonetization drive.
  • MSS as SLR bonds: MSS bonds can also be used to calculate banks’ mandatory bond holding.
  • MSS bonds does not increase Government’s fiscal deficit.
  • According to CRISIL, the stock of G-secs with the RBI, necessary to conduct reverse repo operations, is limited. So MSS is needed.